Barclays to close tax avoidance unit and axe 2,000 jobs as it tries to recover from Libor scandal

• Antony Jenkins is to announce the moves on Tuesday
• They are an attempt to move the bank away from its scandal-hit past
• The bank's annual results will also be released

Changes: Barclays boss Antony Jenkins is to scrap the company's tax avoidance unit in a bid to move away from the bank's scandal-hit past

Barclays is to shut down a controversial unit used to slash tax bills in a bid to ‘shred’ the legacy left by former boss Bob Diamond.
Critics last night welcomed the move but baulked at the idea that the lender has had a ‘Road to Damascus moment’ over its ethics.
Barclays, which is fighting to salvage its reputation after a string of scandals, will unveil the plans after its financial results tomorrow, when it counts the cost of its wrongdoing.
It is expected to slash up to 2,000 ‘casino bankers’ at its investment arm Barclays Capital as part of a shake-up. But in its most eye-catching bid to convince the public that it is improving its culture, it will also announce the closure of its structured capital markets business.
This secretive division helps companies avoid tax through a network of offshore tax havens and was previously run by its highest-paid banker Roger Jenkins.
But it has also been used by Barclays to cut its own tax bill in the UK, heaping pressure on ordinary households to bridge the £32billion annual shortfall in HM Revenue & Customs’ coffers.
Last year it was ordered by the Treasury to repay half a billion pounds after being caught out using two ‘aggressive’ loopholes to avoid paying tax.
Barclays chief executive Antony Jenkins will describe the activities of its tax-avoidance arm as ‘legal’ but ‘incompatible with our purpose’, pledging ‘a new approach for a new era of banking’.

In the closest the bank has come to admitting widespread tax avoidance, he will admit that in some cases the unit ‘relied on sophisticated and complex structures, where transactions were carried out with the primary objective of accessing the tax benefits’. He will say: ‘We get it. The old ways weren’t the right way to behave nor did they deliver the right results – for banks themselves or for wider society.

Job cuts: The move will see some 2,000 investment banking jobs axed by the firm

‘There must be a new approach for a new era of banking. Banks that fail to change will become failing banks. My message is Barclays is changing.’
The move comes amid fresh accusations that Barclays helped clients avoid tax on an ‘industrial’ scale. In a Panorama investigation aired on BBC One tonight, a former insider will claim that the small team of 100 staff at the structured capital markets unit would share huge rewards from the profits of tax avoidance deals.

Scandal: The closure is part of Mr Jenkins' drive to 'shred' the legacy left by former boss Bob Diamond who resigned following the bank's £290 million Libor rigging settlement last year

‘Some tax restructuring is common in a lot of banks, and there’s nothing wrong with it. The issue is they turned it into an industry within the bank.’
The tax avoidance arm was run by Roger Jenkins, a former boyfriend of supermodel Elle Macpherson, who made as much as £40million a year before leaving the bank in 2009. Mr Jenkins, 57, is also one of several current and former Barclays executives being investigated by the Serious Fraud Office and the City watchdog over fees paid to Middle East investors during the financial crisis.
Campaigners welcomed Barclays’ decision to close its tax avoidance arm but said it needed to be accompanied with a reform of the system to make it harder for companies to dodge tax.
Robert Oxley, from the TaxPayers’ Alliance, said: ‘Companies shutting down controversial units might ease public anger but it doesn’t solve the problem of our broken  tax system. Until it is reformed the public will remain deeply unhappy when they see companies able to exploit relief and loopholes simply not open to the rest of us.’
Chief executive Mr Jenkins admitted to the banking commission of MPs and peers last week that the overhaul of his bank amounted to ‘shredding’ the legacy left by his predecessor Mr Diamond.
He admitted that an ‘aggressive’ and ‘self-serving’ culture had developed under the American.
Barclays last night said it paid its fair share of tax in the UK, having paid £300million of corporation tax on profits of £1billion in 2011.