Former directors of Swiss Bank UBS, who received substantial bonuses through an offshore tax avoidance scheme, are now top UK Treasury officials responsible for the tax regulation of RBS, Lloyds Banking group, Northern Rock and others.
Robin Budenberg, UKFI chief executive in charge of the public’s stakes in RBS, Lloyds and Northern Rock, and Jonathan Taylor, Treasury banking regulator, are both former directors of Swiss Bank UBS.
In 2003 they and 424 other top bonus-earners in London avoided tax and national insurance bills on £100m worth of bonuses through a complex offshore arrangement, only now exposed in a tax tribunal.
The scheme – known as NECAP and planned with the help of tax avoidance specialists Ernst & Young – involved routing bonuses for bankers who were entitled to more than £20,000 for 2003 through Jersey trustees and an offshore nominee company, Lively Ltd, into another Jersey company called ESIP Ltd. Even UBS’s own officials admitted to the tribunal that it was “a tax avoidance scheme”.
Last year former UKFI chairman Glen Moreno was exposed by Private Eye as a trustee of the Liechtenstein Global Trust, home to many a tax dodger’s secret stash. Moreno, who at least hadn’t avoided his own tax bill, stepped down. What hope then for Budenberg, one of whose jobs is to enforce the clampdown on banking tax avoidance?