Bank Fines to Aid British Charities Linked to Poppy Tribute

Bank Fines to Aid British Charities Linked to Poppy Tribute

LONDON (Reuters) – Fines paid by banks for rigging interest rates will be used to finance a tax break for British military charities raising funds from a First World War memorial that has brought millions of visitors to the Tower of London.

The Treasury has said it will waive the value added tax (VAT) on the sale of hundreds of thousands of bright red ceramic poppies that form a hugely popular installation marking the centenary of the outbreak of the Great War.

The government will donate the amount it would have received in VAT — 1.1 million pounds ($1.7 million) — to six military charities.

It said some of the money it has collected in fines imposed by British authorities on seven banks and brokers accused of rigging the benchmark Libor interest rate will be used for the donation.

That comes on top of the proceeds from every poppy sold already set to be shared among the charities, which include Combat Stress and the Royal British Legion.

The government certainly has the funds to make the VAT gesture. Banks including Royal Bank of Scotland, Barclays and Switzerland’s UBS have paid 460 million pounds ($730 million) to British financial regulators to settle allegations of interest rate rigging.

Read more at Reuters