Bank close to £500m deal on tax

JPMorgan is said to be close to a £500 million settlement with the Government over a tax-avoidance scheme for bonuses.

The investment bank is winding up a Jersey-based trust and has asked more than 2,000 current and former staff to contribute to the settlement, according to the Financial Times.

The news comes with corporations' tax affairs facing increased scrutiny, after Starbucks this week responded to public anger by volunteering to pay millions of pounds to the Treasury.

Employee benefit trusts (EBTs) have in the past allowed companies and staff to avoid paying employer's national insurance contributions and income taxes.

Many are now being wound up after laws were passed clamping down on their use.

An HM Revenue and Customs spokesman refused to comment on individual cases, but said: "The Government has legislated to remove any doubt that arrangements involving third parties, including EBTs, are ineffective as a way of avoiding tax.

"Our view is that a large number of EBT schemes didn't work under the previous legislation; where that is the case we have challenged and are continuing to challenge them."

A spokesman for JPMorgan told the FT: "Our employee trust has always been transparent ... and its independent trustee has consistently paid taxes in accordance with UK tax law."