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LONDON, May 26 (Reuters) - Britain's banks have in recentyears paid a third of the corporation tax they were paying lessthan a decade ago despite a rebound in profits, a study showedon Tuesday.
The study comes as HSBC and Standard Chartered assess whether to move their headquarters to Asia,partly due to pressure from shareholders after a rise in a UKbank tax.
But UK corporation tax receipts from banks fell to 1.3billion pounds ($2 billion) in 2011/12 and 2.3 billion pounds in2012-13 from 7 billion pounds in 2005/06, according to a studyfrom Cambridge Judge Business School. That left banks payingjust 4 percent of total UK corporation tax receipts in 2011/12from 20 percent six years earlier.
"The exact reasons are difficult to pinpoint due toincomplete and patchy disclosure requirements on banks, which webelieve obstruct analysis," said Geoff Meeks, a co-author of thestudy and professor of financial accounting at Cambridge Judge.
The profitability of major UK banks recovered to levels seenbefore the financial crisis, but Meeks said there was a"paucity" of disclosure on how banks pay tax between nationaljurisdictions.
Four of the big UK banks paid more in global tax between2010 and 2012 than between 2005 and 2007, but only 11 percent -or 1.4 billion pounds - was paid in Britain in 2010/12, comparedto 30 percent in the earlier period, according to the study,published in the journal Fiscal Studies.
Meeks said a rise in tax-deductible impairments due largelyto bad loans contributed to the fall in corporation taxpayments, but the drop could also reflect banks reclassifyingsome UK-originating profits to other jurisdictions, a rise inprofits made overseas or more generous UK tax exemptions.
Britain introduced a bank levy in 2010 to ensure banks paida "fair contribution" to society after the 2007/09 financialcrisis. HSBC is expected to pay $1.5 billion under the levy this year, up from $900 million in 2013.
The bank, Europe's biggest, is assessing its best domicileon a number of factors, including taxation. It paid $7.9 billionin total taxes last year, including $2.4 billion in Britain and$1.3 billion in Hong Kong.
But that included only $69 million in UK corporation tax,because it allocates much of its global costs to its UKoperations, meaning it can book more profit in lower taxcountries such as Hong Kong. ($1 = 0.6494 pounds) (Reporting by Steve Slater, editing by David Evans)
