Analysis: Barclays is not the only bank avoiding taxes

So far no bank will admit to using the same loophole that Barclay's used so they did not have to pay tax on some of their earnings. However, it is perfectly clear that others have using the same technique in recent years. Indeed RBS, the taxpayer owned bank followed the technique, called 'liability management' as recently as 2010. The difference is that they paid tax on it.

During the last decade it became a trend for banks to sell off bits of their debt, subordianted debt if you really want to know, to get the loss making chunks off their books. It made financial sense and was not liable to tax. In 2010 however the taxman spotted this trend and changed the rules so that banks selling off those bits of debt would have to pay tax for the privilege. Some of the banks, like RBS have continued to engage in 'liability management' and pay tax, but Barclays had found a legal way round.

The calculation at HMRC has been that by doing so Barclays has not broken the law but have broken the spirit of the tax code they signed up to. Of all the UK based banks Barclays most experts would agree they take the smartest, or the most aggressive approach to tax, depending how you see it. But it is clear there is some anxiety about the fact they have been asked to pay tax back after the event. The independent tax expert, John Whiting, who advises the government, has warned of the danger of setting a precedent.