LONDON: Seven of the biggest investment banks operating in London paid little or no tax in Britain last year, despite reporting billions of dollars in profits, a Reuters analysis of corporate filings shows.

In recent months, the seven investment and corporate banks operating in London reported figures showing they paid a combined $31 million in corporation tax in 2014. Between them the banks generated revenues of $31bn in the UK, profits of $5.3bn and employed 33,000 staff.

Five of the banks — JP Morgan, Bank of America Merrill Lynch, Deutsche Bank AG, Nomura Holding and Morgan Stanley — said their main UK arms paid no corporation tax, as Britain calls corporate income tax.

The filings show that the seven banks, which also include Goldman Sachs and UBS AG, used tax breaks and tax losses generated during the banking crisis to reduce their tax bills.

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The filings also show that at least some of the banks paid no tax because they reported losses in London, while reporting profits in much smaller affiliates in lower tax jurisdictions. The bank filings are available because of a 2013 change to EU rules that requires banks to publish country-by-country profit and tax break-downs. The British government says it is leading international efforts to ensure corporations pay their fair share of tax, after public anger at reports in recent years that companies such as Google and Starbucks where shifting profits out of Britain to avoid tax.

Lawmakers and tax campaigners said that after receiving so much support during the crisis, it was wrong that banks could operate almost tax free.

“The tax receipts from these large financial institutions show what a charade their claim to pay their fair share has become,” said John Mann, member of parliament with the opposition Labour party.

“They rely on the taxpayer to underwrite their risk, yet they pay a minimal return back to the exchequer.”

Spokespeople for the banks all declined to comment although their filings noted that they followed all tax rules and noted that tax payments can be volatile and may reflect profits generated in earlier years.

Published in Dawn, December 23rd, 2015