LONDON, England – Barclays PLC revealed yesterday that it is the bank targeted by the British Treasury’s action to shut down two methods of avoiding tax, a change in the law that could cost the bank up to £500 million ($68.6 billion).

Insisting that its methods complied with existing law, Barclays said it had voluntarily informed tax officials that it had repurchased some of its debt “in a tax-efficient manner.”

“Barclays also disclosed its participation in an authorized investment fund which is also legal and compliant with the tax code,” the bank said.

Announcing the legislation on Monday, the Treasury described the two methods as “highly abusive” and intended to circumvent previous legislation to block tax avoidance. It is drafting legislation to bar these arrangements retrospective to December 1.

“We do not take today’s action lightly, but the potential tax loss from this scheme and the history of previous abuse in this area mean that this is a circumstance where the decision to change the law with full retrospective effect is justified,” David Gauke, a senior Treasury official, said Monday.

The British government has said it could charge the bank more than £500 million to make up for the unpaid tax, but the bank reportedly disputes the amount.

“Barclays respects the decision … to adjust the tax laws and will, of course, comply with the modified law once it is in place,” the bank said, adding that the change would not have a material impact on profit and would not require amendment of its preliminary results released on February 10.

Barclays shares were fractionally lower at 243.35 pence in late morning trading.

Barclays’ statement came a day after another British bank, HSBC, disclosed in its annual report that it is involved in a dispute with UK tax authorities which could cost the bank US$4.9 billion ($423.6 billion) plus interest.

HSBC said the issue, covering the years from 2002 to 2009, involves shares in its Asian and certain European subsidiaries which are held by holding companies registered in the Netherlands. British tax authorities contend that dividends paid by the subsidiaries are subject to UK tax.