Douglas Flint (new chairman at HSBC) claimed the £800 million increase in the banking levy imposed by the government last month should rather be given to shareholders. Last year the bank more than doubled pre-tax profits (to $19[£11.7] billion from its global operations. This led Flint to criticize the coalition increasing the industry’s levy to £2.5 billion in 2011.
In 2010, the HSBC incurred post-crisis special taxes to France totaling $42 million. Indeed UK tax on bank profits, “constitutes an additional cost of basing a growing multinational banking group in the UK.” HSBC continuously warns it will leave if the rules become too difficult. The company makes most of its profits outside Europe and America. Flint wasn’t bothered by the government increasing taxes but the taxes on business overseas which makes it less attractive for them to have their headquarters here. As well, the tax was basically a tax on the bank’s shareholders, promising to escalate dividends if/when the government alters or withdraws the tax.