Why are Banks Paying so Little UK Corporation Tax?

This note explores the dramatic fall in receipts of UK Corporation Tax (UKCT) from banks, and the wide gap between the corporation tax accruals recorded in banks' financial statements, and the UKCT receipts recorded by the tax authorities. It reviews changes in tax rates, in operating profits, in pre-tax profits (allowing for tax-deductible asset impairments), and in the share of profit originating in, or recorded in, overseas jurisdictions. It assigns significant roles to impairments and to overseas profits, and suggests that the recovery in banks' global operating profits will not be accompanied by an early sharp recovery in UKCT receipts