Page last updated at 13:52 GMT, Thursday, 29 January 2009

TUC calls on banks to come clean

Brendan Barber
Brendan Barber wants banks to disclose their tax haven activities

The TUC has called on the government to force High Street banks to come clean about their activities in tax havens.

It wants those banks that have received taxpayer money, or assistance from the Bank of England, to fully disclose their tax payments in these tax havens.

The union said its research showed that Barclays, Lloyds, HSBC and RBS have over 1,000 subsidiary companies in tax havens dotted across the world.

All four banks said that they comply with all relevant tax laws.

The government owns a stake in Lloyds and RBS and the union said both HSBC and Barclays have benefitted from the extra liquidity the Bank of England has pumped into the banking sector.

Not every tax haven subsidiary will "be used for tax avoidance," said the TUC.

Cap in hand

The banks may not have broken tax laws, but taxpayers - which owns a stake in some banks - have the right to know the full extent of their activities and liabilities, the union said.

"Even those [banks] who come cap in hand to the taxpayer and Bank of England continue to do business in tax havens," said Brendan Barber, the TUC general secretary.

Where we do conduct business overseas, our clear policy is to meet in full all tax payments and be fully compliant with the relevant tax laws and regulation
Lloyds Banking Group

"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," he said.

"We cannot know the extent of these activities. Indeed one of the main attractions of tax havens is their secrecy," he said.

He called for a full public enquiry to investigate "the full extent of their [the banks'] tax avoidance".

Servicing clients

The banks in question refuted any charge of tax avoidance.

Barclays said it is active in over 50 countries and, in order "to service its clients' needs, it has incorporated subsidiaries in a number of jurisdictions. Barclays complies with taxation laws in the UK and the other countries in which it operates."

Lloyds Banking Group said that the "vast majority" of its business is based in the UK, but that it does have businesses outside the UK.

"Where we do conduct business overseas, our clear policy is to meet in full all tax payments and be fully compliant with the relevant tax laws and regulation," it said.

The Royal Bank of Scotland said: "RBS complies fully with all relevant offshore tax regimes. Any changes to those regimes are matters for regulators and governments."

HSBC said that it did not take any money from the government and added that it "does not seek to avoid taxation and has an excellent relationship with HMRC and the other regulators and authorities under whose guidance and rules we operate."

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