Government Minister Dodges Tax Pledge on Multibillion-Pound Loophole for Banks.
Lucy Rigby, the UK's city minister, has been accused of ignoring taxpayers after appearing dismissive about a £2 billion tax loophole that could benefit big banks at the center of the car loans scandal. A parliamentary Treasury committee member, Bobby Dean, urged her to intervene, citing concerns over lenders such as Barclays, Lloyds and Santander taking advantage of this loophole to sidestep paying tax on compensation linked to corporate misconduct.
The 2015 rules designed to prevent banks from reducing their tax bills by deducting compensation payouts from profits are set to be exploited by these financial institutions. Motor finance divisions registered as "non-bank entities" despite being part of larger banking groups will fall outside the scope of these rules, while specialist lenders involved in the scandal, including car manufacturers' finance arms, are also exempt.
According to the Office for Budget Responsibility, this loophole could result in £2 billion being lost by taxpayers over two years. Dean, a Liberal Democrat member of the Treasury committee, expressed frustration with Rigby's response, stating that it was "a complete non-answer" and that she had again sided with industry interests instead of consumers.
Rigby dismissed the concern, stating that companies not classified as banking organizations would be exempt from the 2015 rules. However, many have criticized this approach as ineffective, particularly with the Financial Conduct Authority's £11 billion car loan compensation scheme drawing criticism from both consumer advocacy groups and lenders. The regulator is expected to outline its next steps in February or March.
The government has emphasized the need for motor finance schemes to be accessible and affordable for consumers while also seeking a resolution of this issue.
Lucy Rigby, the UK's city minister, has been accused of ignoring taxpayers after appearing dismissive about a £2 billion tax loophole that could benefit big banks at the center of the car loans scandal. A parliamentary Treasury committee member, Bobby Dean, urged her to intervene, citing concerns over lenders such as Barclays, Lloyds and Santander taking advantage of this loophole to sidestep paying tax on compensation linked to corporate misconduct.
The 2015 rules designed to prevent banks from reducing their tax bills by deducting compensation payouts from profits are set to be exploited by these financial institutions. Motor finance divisions registered as "non-bank entities" despite being part of larger banking groups will fall outside the scope of these rules, while specialist lenders involved in the scandal, including car manufacturers' finance arms, are also exempt.
According to the Office for Budget Responsibility, this loophole could result in £2 billion being lost by taxpayers over two years. Dean, a Liberal Democrat member of the Treasury committee, expressed frustration with Rigby's response, stating that it was "a complete non-answer" and that she had again sided with industry interests instead of consumers.
Rigby dismissed the concern, stating that companies not classified as banking organizations would be exempt from the 2015 rules. However, many have criticized this approach as ineffective, particularly with the Financial Conduct Authority's £11 billion car loan compensation scheme drawing criticism from both consumer advocacy groups and lenders. The regulator is expected to outline its next steps in February or March.
The government has emphasized the need for motor finance schemes to be accessible and affordable for consumers while also seeking a resolution of this issue.
they're just dodging tax left & right 
and it's all at the expense of us taxpayers! i mean, £2 billion is like, a big deal 
and they're just letting those big banks off scot-free. it's like rigby thinks she's some kinda superhero or something 
instead of listening to people who actually care about this stuff. 
the financial conduct authority needs to get its act together & take these lenders down a peg 
I'm so done with these politicians dodging answers, it's like they're trying to avoid a math problem 
. Like, how hard is it to say "yeah, we messed up" or "we need to fix this"? 
The whole thing just smells like a big bank bailout 
. Taxpayers deserve better than to have their money siphoned off by these loopholes 
. We need real action on this, not just empty promises 
.
. The fact that companies aren't even being classified as banking orgs to get exempt from the rules just seems like a bunch of mumbo-jumbo to me 
. What's the point of having regulations if they're not going to be enforced properly? We need to keep pushing for change here 
. it seems to me that Lucy Rigby is just making excuses for the banks and not really trying to help consumers out... can't she just be straight about this already? 
! it's so unfair that banks like Barclays & Lloyds are gonna take advantage of this £2 billion loophole 
. I mean, who needs to pay taxes when you can just call yourself a 'non-bank entity'? It's like they're trying to mortgage our future and get out of paying the bill 
.
. what's the point of having rules if you're just gonna let them bend or break 'em whenever it suits them? it's not like they'd suddenly develop a conscience or anything... meanwhile, the £2 billion tax loophole is just going to line the pockets of the fat cats and leave us with the bill 
. I mean, it's not like banks aren't already making enough money, right? And now they get to keep even more of our hard-earned cash because some loopholes allow them to skirt the rules 
. This loophole is basically a backdoor for these banks to get away with stuff they shouldn't be able to do