HSBC May Quit UK Over Taxes. Or Not.

by Jason Gorringe, Tax-News.com, London

09 October 2006

Global banking giant HSBC has sought to address suggestions in the UK media that it is actively considering moving its headquarters and tax domicile from the United Kingdom when the matter comes under review in 2008.

HSBC Holdings has been located in the UK for tax purposes since 1993, when it took over Midland Bank. The location is reviewed every few years, and speculation that a move was imminent was sparked by a recent speech delivered by the bank's Financial Planning and Tax chief, Chris Spooner.

According to a Guardian report published last week, Mr Spooner told the audience at a Chartered Institute of Taxation conference that:

"The UK used to be a good place to be for purely tax reasons. I am not sure if that is the case any more."

He reportedly went on to add that:

"HSBC pays a large amount of tax and we are the ones who decide who gets it. We take the competitive environment seriously and there are others like us."

However, speaking to Reuters, an unnamed spokesman sought to dampen the flames of media speculation surrounding Mr Spooner's remarks, announcing that:

"It is not true that we might be leaving Britain for tax reasons."

He continued:

"It would be possible to go somewhere where there is zero corporation tax which would save us in the region of 400 million pounds a year. But those places tend not to have regulators as complex and aware as the FSA."

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