The TUC is calling on the govt to make the banks it owns come clean on their tax dodging activities.
(Come clean! What chance the new Met Commissioner floods the City with cops to nab the corporate crooks who have plunged us into recession?)
Richard Murphy, tax expert and blogger, carried out the research…
Lloyds TSB, RBS, HSBC and Barclays have between them well over a thousand subsidiary companies (1,207) incorporated in tax havens. The most popular location is the notorious tax haven of the Cayman Islands with 262 companies, Jersey is second, with 170 companies. HBOS is not included as it has not published a list of its subsidiary companies for 2006, 2007 or 2008 in either its annual report or its Companies House return, in apparent breach of company law.
Not every subsidiary located in a tax haven or financial secrecy jurisdiction will necessarily be used for tax avoidance, says the TUC analysis. Some may be simply providing banking services to the local population and business community of countries such as Ireland – or have particular commercial links to countries such as HSBC’s ties to Hong Kong.
TUC General Secretary Brendan Barber said: ‘The taxpayer is now propping up Britain’s banks, either directly or indirectly. Even those who have not had direct bail-outs now trade with an implicit guarantee from the Government. The irresponsible behaviour of banks here and abroad is the biggest cause of the recession.
‘Yet even those who come cap in hand to the taxpayer and Bank of England, continue to do business in tax havens. This raises questions about whether part of the objective is avoiding paying a fair rate of tax to the UK – a tax gap that has to be made up by the rest of us.
‘We cannot know the extent of these activities. Indeed one of the main attractions of tax havens is their secrecy. There is no suggestion that anyone has broken any tax laws, but now banks have public stakes or trade with the knowledge that the taxpayer stands ready to bail them out, the taxpayer has a right to know the full extent of bank activities and liabilities across the world.
‘We should know where banks undertake their activities, where they record their profits and where they pay their taxes. Country-by-country reporting of their activities is essential if we, the UK taxpayers, are to know the risk we are under-writing.
‘Voters are increasingly angry at the banks, who they rightly think must take a large share of the blame for the jobs and homes that will be lost in this recession. The Government should set up a tough public inquiry into why our financial system came so close to collapse – and it should investigate the full extent of their tax avoidance.’