It's been reported that HSBC are thinking of leaving the UK because of our tax system. It is said that the group's head of financial planning and tax, Chris Spooner, issued the warning at a Chartered Institute of Taxation conference in London.
But that was yesterday's news. Today Reuters reports that HSBC has no intention of quitting. Their spokesperson is reported as saying:
"It is not true that we might be leaving Britain for tax reasons,"
"One of the benefits of London in the past has been a relatively good tax regime. The UK needs to be aware of that being one of its competitive advantages,"
But he then noted that whilst going somewhere where there was a zero tax would save them £400 million a year (a claim that is almost certainly not true - tax would still be due on the UK operations, and by no means all of that could be avoided by a move) the advantages of London were considerable. Although he only mentioned its good regulation perhaps he should have mentioned trained people, a favourable transport infrastructure, an ideal time zone, a credible stock market, good double tax treaties and so on. You won't get that in a zero tax territory.
So what's happening here? I suggest two things are going on. First of all we have a tax accountant who is out of touch with commercial reality (which is about par for the course) and we have people playing political blackmail. There's no better word for it. As usual a large corporation wants all the benefits of London and does not want to pay for it. There's only one way to deal with this.The best response is to simply ignore such posturing as ill-planned rhetoric. Which is what HSBC's press management suggests to be the case.