HSBC’s UK tax bill looks to be £2bn less than I’d expect

I’ve been looking at HSBC’s accounts today.

Using my method of unitary taxation and applying my GRAPIST, I conclude that HSBC should have paid at least £2bn pounds more tax in the UK.

Look, here’s a picture from their accounts:

RJM cannot do maths can heFrom this picture you can tell I’ve read the accounts.

Now, let’s look at that a different way. Let’s apply the unitary apportionment formula to group profits.

Why do we do this? Because it is unarguably the only fair way top decide tax liabilities.

I know the company had 48,000 employees in the UK out of 270,000 in all.

That’s assuming that they aren’t treating their employees like nannies and employing them through personal service companies.

I can get that $9,149 of income out of $68,330 was in the UK, whilst $18,391m of assets out of $79,935 were in the UK.

The classic unitary apportionment formula says that profit should be weighted to a country in proportion with one third of the weighting applying to income, assets and staff.

In passing, this is why we need country-by-country reporting: these accounts have told me nothing.

Anyway, I make it about £500m more on what they paid (ignoring all the adjustments and things you’d do for tax purposes – that always confuses things).

But it is now important to remember that unitary taxation isn’t actually anything but an arbitrary measure of what somebody might want the law to be. So we have to then apply our expectation gap to our workings which reproduces the effect of a sensible anti avoidance principle.

From this, I calculate that HSBC should have paid £2bn pounds. Therefore I can say with absolute certainty and without worry of misleading the public that I expect HSBC’s UK tax to be £2 bn more.

You have been reading another well-researched and logical post from Murphy Richards.

You’re welcome.


6 thoughts on “HSBC’s UK tax bill looks to be £2bn less than I’d expect

      • Sorry. I didn’t mean to be rude, but surely you need to consider the impact and intention of tax legislation, even once you’ve chosen how to allocate profits?

        I’m just trying to say aren’t you just multiplying the profit by the rate of tax and basically ignoring all tax legislation altogether?

        Sorry if you think this is some sort of attack, but it’s quite important so that I and other readers can understand your argument, as opposed to just accepting your conclusions.

      • I’ve warned you. I shan’t approve any more comments from you until you have said sorry for your rudeness.

        As for your question, it is tediously absurd. My arguments have been widely accepted so it is only my conclusions that remain to be discussed.

  1. THis is why our NHS is being dismanteled, so that George Osbourne can fill his friends’ snouts with more bank bonuses at the trough that is the City of London.

    Keep up the good work Murphy. You’re infallible logic is destroying capitalism slowly but surely.

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