Barclays has previous when it comes to tax avoidance Early last year, it was forced into an embarrassing admission. In front of the Treasury Select Committee, chief executive Bob Diamond, who had nurtured SCM when he was head of BarCap, was forced to reveal that the bank operated nearly 300 subsidiaries in tax havens and had paid just £113m of corporation tax in the UK in 2009 - a year in which it handed out £3.4bn in bonuses. Since then, the questions have not gone away. Politicians have queried whether a bizarre deal struck in 2009 to move billions of toxic assets off its balance sheet was not just a tax ruse. The Protium arrangement raised such serious concerns in the US that the authorities would not let it drop until the deal was unwound at great expense to shareholders last year. Analysis of Barclays accounts by The Daily Telegraph has raised further questions. According to the 2010 results, the bank generated £591m in "tax losses carried forward" despite making £6bn of profits before tax. The tax gain suggested the bank crystallised £2bn of losses that year, which the annual report said "mainly relates to entities in the USA, the UK and Spain." However, Barclays would not disclose where the £2bn of losses were incurred - once again muddying the waters. The bank now has assets that it can offset against future tax payments that are almost as large as Royal Bank of Scotland and Lloyds Banking Group. While both the state-backed banks made huge visible losses, Barclays has reported profits every year for more than a decade. The bank has always tried to draw attention to the tax it is paying, which the latest results showed was 32.8pc of profits in 2011, but - so far - it has not been enough to answer its critics. Meanwhile, the question of business ethics keeps arising. At the end of last year, in his BBC Business Lecture, Diamond remarked that "rebuilding trust requires banks to be better citizens." Barclays has also repeatedly stressed: "We are signatories of the UK Government's code of conduct on tax and comply with the spirit and letter of the tax code." However, the authorities this week clearly decided that Barclays has been complying with the letter but not the spirit of the code. According to David Gauke, Exchequer Secretary to the Treasury, Barclays should never have devised the schemes that it has been ordered to close in the first place. "The bank that disclosed these schemes to HM Revenue & Customs (HMRC) has adopted the Banking Code of Practice on Taxation which contains a commitment not to engage in tax avoidance," he said. The government is clear that these are not transactions that a bank that has adopted the code should be undertaking. As Gauke observed, the retrospective charge, which sources say will cost Barclays about £150m, will deliver the bank "a substantial reputational hit." And, once again, it is not a surprise it was Barclays that came under fire.