Bank chief hits back over tax schemes

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The head of Goldman Sachs has cautioned politicians against subjecting companies to public opprobrium for responding to incentives in the tax system.

Prime Minister David Cameron has spoken out against some forms of “aggressive” tax avoidance and said he would use Britain’s presidency of the G8 to ensure that individuals and businesses “pay their fair share”.

In an apparent swipe at Starbucks, whose failure to pay corporation tax in the UK over three years sparked outrage, Mr Cameron said that it was time for businesses to “wake up and smell the coffee” about public anger.

But chief executives at 32 of Britain’s biggest companies have warned against publishing more details of their tax affairs, according to the Daily Telegraph.

Goldman Sachs chief executive Lloyd Blankfein said that public criticism of people’s tax arrangements risked “criminalising every right-thinking person who organises his or her affairs in a sensible way”.

Goldman Sachs came under fire this month for considering deferring bonus payments to allow staff to benefit from the forthcoming cut in the top rate of income tax from 50p to 45p. The bank decided against the scheme.

Mr Blankfein told BBC Radio 4’s Today programme: “If all of a sudden, in addition to the rules that generate certainty for people, the signposts become so amorphous and so subject to second-guessing, you’re making everything uncertain and it’s very hard to organise your affairs in a sensible way.

“I’m not saying that you are exculpated from any pressure merely because you meet the rule of law – we’ve never said that, we don’t live that life. But I would say ‘Are you going to hold people up to public opprobrium because a house they could have sold in January instead they sell in May because there was a profit to be made on that house?’

“If you do that, you ... criminalise every person who organises his or her affairs in a sensible way.”

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