Analysis of the banks' UK operations undertaken by Reuters found that JP Morgan, Bank of America Merrill Lynch, Deutsche Bank AG, Nomura Holding and Morgan Stanley paid no corporation tax in 2014.
The analysis also showed how an additional two banks — Goldman Sachs and UBS AG — used tax breaks and loopholes to significantly reduce their British tax bills.
Appalling: 7 big investment banks in UK paid just $30m tax last year, despite $5.3bn profits. Five paid no tax in UK https://t.co/xtMTpWsZDY— Ian Birrell (@ianbirrell) December 23, 2015
All up, the seven banks in question paid just US$31 million (£21m) in corporation tax in 2014, despite generating revenues of US$31 billion (£21bn) in the UK, profits of US$5.3 billion (£3.6 bn) and hiring 33,000 staff.
To get around tax loopholes some of the banks recorded losses on their UK operations, but reported to have made profits in countries with more relaxed tax rules.
Makes me sick that the top 5 banks don't pay corporation tax in the uk yet inland revenue prey on the little man trying to do his thing.— Eksman (@Eksman_mc) December 23, 2015
The figures became available following a 2013 European Union banking law that requires banks to publish country-by-country profit and tax breakdowns.
Questions Over UK Tax Credibility
Although the UK government has said it is leading the international crackdown on tax evasion, the findings are sure to reignite the debate over how large corporations with billions of dollars of profits can evade tax in countries like Britain.
Opposition MPs and tax campaigners said it was wrong that big banks could get away with paying little or no tax, particularly given the amount of state support they received during the global financial crisis.
"The tax receipts from these large financial institutions show what a charade their claim to pay their fair share has become," Labour MP John Mann, who also serves on the Treasury Select Committee, said.
"They rely on the taxpayer to underwrite their risk, yet they pay a minimal return back to the Exchequer," Mann said.
So according to @George_Osborne the country has no cash, and yet 5 banks manage to pay zero corporation tax! All in it together my arse!— peter hornsby (@argylepete) December 23, 2015
The banks and Britain's tax authority, Her Majesty's Revenue and Customers (HMRC), have all declined to comment on the findings, however in defense of the investment banks, industry groups say that banks to contribute to the public purse by generating significant amounts of income tax.