HSBC Gears Up for U.K. Value-Added Tax Crackdown

HSBC Bank has warned that its U.K. tax bill could rise as the country is increasingly focusing on curbing strategies used by financial services firms to reduce their value-added tax.

In its preliminary annual report published Feb. 19, the bank’s auditors highlighted its exposure to an uncertain tax position “due to increased focus from HMRC on UK VAT matters” in financial services groups.

PwC auditor Richard Oldfield said, “This is consistent with our expectations based on what we’ve seen across the sector.”

HSBC’s comments come after Her Majesty’s Revenue and Customs, the U.K. tax office, launched a crackdown last year ...