Lord Myners – 2015 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Lord Myners on 2015-02-10.

To ask Her Majesty’s Government whether they intend to ban United Kingdom banks from operating branches or subsidiaries in offshore tax havens; and whether United Kingdom regulators have any regulatory responsibility for those banks, their management or those in the United Kingdom who supervise such activities.

Lord Deighton

The Government does not impose restrictions on where UK banks can operate overseas. However, the UK has championed international tax transparency and through our G8 Presidency has driven the agreement and early implementation of the new global standard for automatic exchange of financial information for tax purposes. To date over 90 countries have committed to exchange such information on a multilateral basis. The UK also remains committed to ensuring that there are effective anti-avoidance rules in place to protect the UK corporation tax base.

This includes the introduction of new Controlled Foreign Company rules (effective from the beginning of 2013) which help to deter and prevent artificial diversion of profits from the UK.

It also includes supporting the G20-OECD Base Erosion and Profit Shifting project which is looking to address weaknesses in international tax rules which allow companies to avoid paying tax on their profits.

The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are the UK financial services regulators. The role of the FCA and PRA in regulating overseas branches and subsidiaries of UK banks is dependent on the specific circumstances of an individual case.

However, I have asked the FCA and the PRA to reply directly to the Noble Lord by letter to explain their role in this area. A copy of the letter will be placed in the Library of the House.