HSBC reviews its retention of London HQ

Britain’s largest bank, is reviewing the retention of its headquarters in
London, giving the Government more jitters following an exodus of companies
angered by the uncertainty over tax policy.

The review, which is understood to have just started, is one conducted about
every three years by the HSBC board, led by the executive chairman, Stephen
Green, The Daily Telegraph reports.

The news follows on
made by a senior HSBC official
two years ago, and first reported in
Accountancy Age, that the bank would consider moving HQ for tax reasons.

Although tax experts believe a decision by HSBC to relocate its head office
is unlikely, the current trend of companies relocating to new tax domiciles
means the decisions reached in the bank’s review will be closely watched across
the City following the exodus of Henderson Group and Regus.

People close to HSBC say the current review is not only focused on tax
issues, but also on the bank’s status as one of Britain’s biggest payers of
corporation tax at £750m which means that, retaining its base in the UK is ‘of
huge significance for the government’.

The bank issued a statement denying it was planning to move: ‘As you would
expect, a company of HSBC’s scale periodically reviews a range of issues in the
interests of competitiveness and its shareholders – from core strategy
(conducted in 2006), to brand advertising, and capital position to major or head
office location. On the latter, it is our opinion that London remains a
crossroads of the world, both geographically and culturally, and we have no
current plans to relocate our head office.’

Further reading:

Hold off on overseas exodus, firms warned

Advisers warn of further relocations

The Daily Telegraph story

Accountancy Age’s story from October 2006

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