The Code of Practice on Taxation for Banks – Annual Report 2023
Published 7 December 2023
© Crown copyright 2023
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1. Introduction
The Code of Practice on Taxation for Banks (the Code) helps to deliver HM Revenue and Customs’ (HMRC) objective of promoting compliance. It was introduced in 2009 to change the attitudes and behaviours of banks towards avoidance because of their unique position as potential users, promoters and funders of tax avoidance.
To strengthen the Code and provide greater transparency, legislation was introduced in Finance Act 2014 which requires HMRC to publish an annual report on how the Code is operating.
The Code describes the approach expected of banks with regard to governance, tax planning and engagement with HMRC. Banks operating in the UK that sign up to the Code commit to adopt good practices in relation to their own tax affairs, and not to promote tax avoidance by others. The Code sets out that banks should:
- adopt adequate governance to control the types of transactions they enter into
- not undertake tax planning that aims to achieve a tax result that is contrary to the intentions of Parliament
- comply fully with all their tax obligations
- maintain a transparent relationship with HMRC
Where HMRC has concerns over whether a bank has met its obligations under the Code, HMRC will take action to address these concerns in line with the published Governance Protocol (the Protocol).
HMRC may name in the annual report banks that are found not to have complied with their Code commitments. A bank can only be named once all the steps set out in the Protocol have been completed.
2. Operation of the Code in the year ended 31 March 2023
Overview
This is the annual report on the operation of the Code, covering the period 1 April 2022 to 31 March 2023 (the Period).
The names of the 316 banks that had adopted the Code as at 31 March 2023 are listed at Annex A. The list includes:
- 314 banks that had adopted the Code at 31 March 2022
- 2 banks that adopted in the year ended 31 March 2023
One entity which was listed as an adopter at 31 March 2022 was a duplicate entry and had been included erroneously.
The 11 banks within the Code population [footnote 1] that had not adopted the Code as at 31 March 2023 are listed at Annex B. This list is drawn from banks which HMRC’s records show to be within the charge to the bank levy (whether or not they have any liability for the Period), and from the list of banks and building societies published by the Prudential Regulatory Authority. HMRC also uses other sources to identify whether a bank is potentially within the Code population, including reviewing those banking entities that are subject to the Corporation Tax Surcharge on Banking Companies.
The Code continues successfully to promote positive behaviours across the banking sector:
-
none of the banks which had adopted the Code by 31 March 2023 has been determined to be in breach of the Code during the Period
-
banks that had adopted the Code did not make any disclosures under the Disclosure of Tax Avoidance Scheme regime in the Period
-
all transactions reviewed during the Period as part of a risk assessment were considered to be Code compliant [footnote 2]
-
no initial concerns were escalated to Director level or beyond during the Period [footnote 3]
HMRC’s guidance on the Code can be found in the Banking Manual.
HMRC’s compliance work with banks
HMRC’s Large Business directorate (LB) manages the tax compliance of the 71 largest banks as well as several smaller banks that are part of large non-banking groups. HMRC’s Wealthy and Mid-Sized Business Compliance directorate (WMBC) manages the tax compliance of smaller banks.
HMRC manages the tax compliance of the largest businesses through the Business Risk Review (BRR+) process. More information on this process can be found in HMRC’s internal manual Tax Compliance Risk Management. Thirty-three of the 71 large banking groups dealt with in LB had a BRR+ during the Period. Since 1 April 2021, all customers not receiving a BRR+ during the period, have had the opportunity to hold an annual conversation with HMRC to discuss business developments and raise any issues.
Since 2016, banks in Large Business that sign up to the Code have been subject to an enhanced BRR+ process, under which the banks’ compliance with the Code is reviewed.
The 4 Code categories on the BRR+ template are:
-
the bank’s compliance with the Code has been reviewed and there are no current concerns
-
the bank’s compliance with the Code is under review
-
there are initial concerns over the bank’s compliance with its Code commitments [footnote 4]
-
there is an interim view that the bank has breached the Code [footnote 5]
At the end of the Period 2 banks were under review as a part of the BRR+ process. All other reviews under the BRR+ process conducted during the Period were noted to have no current concerns. If HMRC discovers any issues that give rise to initial concerns, it will escalate them in accordance with the Protocol.
Smaller banks have no dedicated Customer Compliance Manager (CCM) and instead tax compliance is managed by the WMBC team. For these banks:
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during formal enquiries HMRC emphasises the Code obligation to ‘maintain a transparent relationship with HMRC’ in order to resolve matters quickly and efficiently
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outside the formal enquiry process HMRC raises Code compliance when meeting the representatives of smaller banks in order to ensure they are aware of and meet their obligations under the Code
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generally the banks that the team have interacted with during the year have had an open and transparent relationship with HMRC. Where necessary, the team has reminded customers of their obligations under the Code to encourage collaborative working to achieve early resolution
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no smaller bank has made a Code approach to HMRC during the year
LB and WMBC customer teams may also identify concerns about a bank’s governance, its approach to tax planning or the transparency of its relationship with HMRC during enquiries or other interactions through the year. If so, these are addressed in accordance with the Protocol.
If potential issues involving a bank are identified during compliance work on other customers, HMRC considers whether the available evidence gives rise to concerns about the bank’s compliance with its Code commitments. Where it does, HMRC will investigate the bank’s compliance with all aspects of the Code. Any suspected breaches will be dealt with robustly, in accordance with the Protocol.
HMRC’s response to Code approaches
HMRC encourages banks to discuss any proposed transaction where, on the bank’s analysis, there is a tax result that may be contrary to the intentions of Parliament (as set out in paragraph 4.2 of the Code).
In the Period, HMRC received no pre-transaction Code approaches involving any uncertainty around the intentions of Parliament.
Where HMRC considers there to be no identifiable uncertainty around the intentions of Parliament, HMRC may decline to provide a view. This was the case in one instance in the Period.
The low level of Code approaches continues a trend from previous years. HMRC believes that there are a range of factors that have led to fewer approaches by banks, including a better understanding of the Code, and a continuing evolution in attitudes to tax avoidance.
Annex A: Banks that had adopted the Code at 31 March 2023
This is a list of banks, building societies and other financial institutions known as ‘banks’ adopting or readopting The Code of Practice on Taxation for Banks at 31 March 2023.
It includes all banks that have unconditionally adopted or readopted the Code. Adoption will cover all a group’s operations in the UK and, in the majority of cases, only an agreed principal name for the overall adopting group is shown.
Where requested HMRC has agreed to include names in addition to the principal group name if:
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the names on the Prudential Regulation Authority lists are so different that it would not be obvious that they are connected and covered by the same adoption, or
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a group operating in the UK does so through separately named and independently managed entities and their names are so different that it would not be obvious that they are connected
List of adopters as at 31 March 2023
| Principal name | Adoption includes | Comment |
|---|---|---|
| Aareal Bank AG | ||
| ABC International Bank plc | ||
| ABN AMRO UK Group | ||
| Access Bank UK Ltd, The | ||
| Advanced Payment Solutions Limited | ||
| Agricultural Bank of China Ltd London Branch | ||
| Ahli United Bank plc | ||
| Al Rayan Bank | ||
| Aldermore Bank plc | ||
| Allfunds Bank SA | ||
| Allica Bank Ltd | ||
| Allied Irish Banks plc Group | AIB Group (UK) plc | |
| Alpha Bank London Limited | ||
| ANZ Banking Group | ||
| Arab National Bank | ||
| Arbuthnot Banking Group plc | ||
| Atom Bank plc | ||
| Axis Bank UK Ltd | ||
| B B Securities Ltd | ||
| Banco Bilbao Vizcaya Argentaria SA London Branch | ||
| Banco Bradesco Europe SA | ||
| Banco de Sabadell SA – London Branch | ||
| Banco do Brasil SA – London Branch | ||
| Bangkok Bank Public Co Ltd | ||
| Bank Frick & Co AG | ||
| Bank J. Safra Sarasin (Gibraltar) Ltd | ||
| Bank Leumi (UK) plc | ||
| Bank Mandiri (Europe) Ltd | ||
| Bank of Africa United Kingdom PLC | ||
| Bank of America Group | ||
| Bank of Baroda | ||
| Bank of Baroda (UK) Ltd | ||
| Bank of Beirut (UK) Ltd | ||
| Bank of Ceylon (UK) Ltd | ||
| Bank of China | ||
| Bank of Communications Co Ltd London Branch | ||
| Bank of India | ||
| Bank of Ireland | ||
| Bank of London and The Middle East plc | ||
| Bank of Montreal | ||
| Bank of New York Mellon (UK Group) | ||
| Bank of Nova Scotia, The | ||
| Bank of Taiwan – London Branch | ||
| Bank of the Philippine Islands (Europe) plc | ||
| Bank Saderat plc | ||
| Bank Sepah International plc | ||
| Banking Circle SA | ||
| Banque Banorient France | ||
| Banque Havilland SA | ||
| Banque Transatlantique | ||
| Barclays Bank | ||
| Bath Investment & Building Society | ||
| BAWAG PSK International | ||
| Bayerische Landesbank – London Branch | ||
| Beverley Building Society | ||
| Birmingham Bank Ltd | ||
| BNF Bank plc | ||
| BNP Paribas | ||
| British Arab Commercial Bank plc | ||
| Brown Shipley | ||
| Buckinghamshire Building Society | ||
| Byblos Bank Europe SA | ||
| C Hoare & Co | ||
| CAF Bank | ||
| Caixabank SA | ||
| Cambridge & Counties Bank Ltd | ||
| Cambridge Building Society | ||
| Canadian Imperial Bank of Commerce | ||
| Canara Bank | ||
| Carnegie Investment Bank AB | ||
| Castle Trust Capital plc | ||
| Cecabank SA | ||
| Chang Hwa Commercial Bank Ltd – London Branch | ||
| Charity Bank Ltd, The | ||
| Charter Savings Bank | ||
| Chetwood Financial Ltd | ||
| Chiba Bank Ltd – London Branch, The | ||
| China Citic Bank (London Branch) | ||
| China Construction Bank Corporation London Branch | ||
| China Merchants Bank Co Ltd | ||
| Chorley & District Building Society | ||
| CIMB Bank Berhad – London Branch | ||
| Citadel Securities (Europe) Ltd | ||
| Citi | ||
| ClearBank Ltd | ||
| Clearstream Banking SA | ||
| Close Brothers Group plc | ||
| Clydesdale Bank plc | Virgin Money, Yorkshire Bank | |
| Commerzbank AG | ||
| Commonwealth Bank of Australia, The | ||
| Co-operative Bank plc, The | ||
| Coventry Building Society | ||
| Crédit Agricole Group | ||
| Crédit Industriel et Commercial Group | Crédit Industriel et Commercial and Banque Transatlantique SA London Branch | |
| Credit Suisse | ||
| Crown Agents Bank Ltd | ||
| Cumberland Building Society | ||
| Cynergy Bank Ltd | ||
| Daiwa Capital Markets Europe Ltd | Daiwa Corporate Advisory Ltd, Daiwa Corporate Advisory Holdings Ltd and Daiwa Asset Management (Europe) Ltd | |
| Danske Bank A/S | Northern Bank Ltd | |
| Darlington Building Society | ||
| DBS Bank Ltd | ||
| DekaBank Deutsche Girozentrale | ||
| Deutsche Bank AG | ||
| Deutsche Pfandbriefbank AG | ||
| DF Capital Bank Ltd | ||
| DNB Bank ASA | ||
| Dudley Building Society | ||
| DVB Bank SE | ||
| DZ Bank | ||
| Earl Shilton Building Society | ||
| Ecology Building Society | ||
| EFG Private Bank Ltd | ||
| Elavon Financial Services Designated Activity Company | ||
| Emirates NBD Bank (P.J.S.C) | ||
| Eurobank Private Bank Luxembourg SA London Branch | ||
| Europe Arab Bank plc | ||
| Export-Import Bank of India | ||
| FCE Bank plc | ||
| FCMB Bank (UK) Ltd | ||
| First Abu Dhabi Bank P.J.S.C | ||
| FirstBank UK Limited | Previously FBN Bank (UK) Limited | |
| First Commercial Bank – London Branch | ||
| FirstRand | ||
| Furness Building Society | ||
| Gatehouse Bank plc | ||
| GB Bank Limited | GB Bank Limited adopted the Code in the period this report covers | |
| GH Vive Limited | ||
| Ghana International Bank plc | ||
| Goldman Sachs | ||
| Guaranty Trust Bank (UK) Ltd | ||
| Gulf International Bank (UK) Ltd | ||
| Gulf International Bank BSC (London Branch) | ||
| Habib Bank Zurich plc | ||
| Haitong Bank, SA | ||
| Hampden & Co plc | ||
| Hampshire Trust Bank plc | ||
| Handelsbanken plc | ||
| Hanley Economic Building Society | ||
| Harpenden Building Society | ||
| Hauck & Aufhauser Privatbankiers AG | ||
| Havin Bank Ltd | ||
| HBL UK Banking Group | Habib Allied Holding Ltd | |
| Hinckley & Rugby Building Society | ||
| HSBC Holdings plc | ||
| Hua Nan Commercial Bank Ltd – London Branch | ||
| ICBC (London) plc | ||
| ICBC Ltd London Branch | Duplicate entry for this entity has been removed | |
| ICBC Standard Bank plc | ||
| ICICI Bank UK Ltd | ||
| IFAST Global Bank Limited | ||
| Ikano Bank AB | ||
| Industrial Bank of Korea – London Branch | ||
| ING | ||
| Intesa Sanpaolo S.p.A. – London Branch | ||
| Investec plc | ||
| Itau BBA International plc | ||
| Jefferies International Ltd | ||
| JN Bank UK Ltd | ||
| John Deere Bank SA | ||
| Jordan International Bank plc | ||
| JP Morgan | ||
| Julian Hodge Bank Ltd | ||
| KBC UK Banking Group | KBC Financial Products Ltd, KBC Bank NV – London Branch and KBC Investments Ltd | |
| KEB Hana Bank | ||
| Kexim Bank (UK) Ltd | ||
| KfW IPEX-Bank GmbH – London Branch | ||
| Kingdom Bank Ltd | ||
| Klarna AB | ||
| Kookmin Bank Co Ltd London Branch | ||
| Korea Development Bank – London Branch, The | ||
| Kroo Limited | ||
| Landesbank Baden-Wϋrttemberg | ||
| Landesbank Hessen-Thüringen Girozentrale (London Branch) | ||
| Leeds Building Society | ||
| Leek United Building Society | ||
| LHV Bank | ||
| Lloyds Banking Group plc | Lloyds Bank plc and Bank of Scotland plc (including Halifax) | |
| Lombard Odier (Europe) SA | ||
| Loughborough Building Society | ||
| Macquarie Group | ||
| Malayan Banking Berhad | ||
| Manchester Building Society | ||
| Mansfield Building Society | ||
| Market Harborough Building Society | ||
| Marsden Building Society | ||
| Mashreq Bank Psc – London branch | ||
| Masthaven Bank Limited | Erroneously listed as Masthaven Name Ltd in previous year’s report | |
| Mediobanca- Banca di Credito – London branch | ||
| Mega International Commercial Bank – London Branch | ||
| Melli Bank plc | ||
| Melton Mowbray Building Society | ||
| Methodist Chapel Aid Ltd | ||
| Metro Bank plc | ||
| Mirabaud and Cie (Europe) SA UK Branch | ||
| Mitsubishi UFJ Financial Group | Mitsubishi UFJ Securities International plc, The MUFG Bank Ltd, Mitsubishi UFJ Trust & Banking Corporation – London Branch, Mitsubishi UFJ Trust International Ltd and Mitsubishi UFJ Asset Management (UK) Ltd | |
| Mizrahi Tefahot Bank Ltd | ||
| Mizuho UK Banking Group | Mizuho International plc, Mizuho Bank – London Branch and Mizuho Capital Markets (UK) Ltd | |
| Monmouthshire Building Society | ||
| Monument Bank Limited | Monument Bank Limited adopted the Code in the period this report covers. | |
| Monzo Bank Ltd | ||
| Morgan Stanley | ||
| N26 Bank Gmbh | ||
| Nacional Financiera SNC – London Branch | ||
| National Australia Bank Ltd | ||
| National Bank Financial Inc UK Branch | ||
| National Bank Of Canada – London Branch | ||
| National Bank of Egypt (UK) Ltd | ||
| National Bank of Greece UK | National Bank of Greece SA London Branch, NBGI Private Equity Ltd, NBG International Ltd, NBG GP Ltd, NBG Finance plc, NBG Finance (Dollar) plc and NBG Finance (Sterling) plc | |
| National Bank of Kuwait (International) plc | ||
| National Counties Building Society | ||
| Nationwide Building Society | ||
| Natixis | ||
| NatWest Group | ||
| Nedbank | ||
| Newbury Building Society | ||
| Newcastle Building Society | ||
| NIBC Bank NV | ||
| Noble Grossart Holdings Ltd | ||
| Nomura UK Group | ||
| NORD/LB Group | NORD/LB Norddeutsche Landesbank Girozentrale and Deutsche Hypothekenbank Aktiengesellschaft | |
| Nordea Bank Abp | ||
| Norinchukin Bank – London Branch, The | ||
| North Lanarkshire Municipal Bank Ltd | ||
| Northern Trust Company, The | ||
| Nottingham Building Society | ||
| OakNorth Bank | ||
| OneSavings Bank plc | ||
| Oversea-Chinese Banking Corporation – London Branch | ||
| Oxbury Bank plc | ||
| Paragon Banking Group plc | ||
| PCF Bank Ltd | ||
| Penrith Building Society | ||
| Persia International Bank | ||
| Philippine National Bank (Europe) plc | ||
| Pictet & Cie (Europe) SA, London Branch | ||
| Piraeus Bank SA – London Branch | ||
| Portigon | ||
| Principality Building Society | ||
| Progressive Building Society | ||
| PT Bank Negara Indonesia (Persero) Tbk – London Branch | ||
| Punjab National Bank (International) Ltd | ||
| Qatar National Bank (Q.P.S.C) | ||
| QIB (UK) plc | ||
| Rabobank | ||
| Raiffeisen International Bank AG – London branch | ||
| Rathbone Brothers plc | ||
| RCI Bank UK Ltd | ||
| Recognise Bank Limited | ||
| Redwood Bank Ltd | ||
| Reliance Bank Ltd | ||
| Riyad Bank – London Branch | ||
| Royal Bank of Canada | ||
| Saffron Building Society | ||
| Sainsbury’s Bank plc | ||
| Santander | ||
| Schroders plc | ||
| Scottish Building Society | ||
| Secure Trust Bank | ||
| Shanghai Commercial Bank Ltd | ||
| Shanghai Pudong Development Bank Co Ltd | ||
| Shawbrook Bank Ltd | ||
| Shinhan Bank – London Branch | ||
| Siemens Bank GmbH | ||
| Silicon Valley Bank UK Branch | ||
| Skandinaviska Enskilda Banken AB | ||
| Skipton Building Society | ||
| SMBC Bank international plc | ||
| Société Générale | Kleinwort Benson | |
| Sonali Bangladesh (UK) Limited | Previously Sonali Bank (UK) Ltd. | |
| Stafford Railway Building Society | ||
| Standard Chartered Bank | ||
| Starling Bank Ltd | ||
| State Bank of India | ||
| State Bank of India (UK) Ltd | ||
| State Street | ||
| Stifel Europe Bank AG | ||
| Suffolk Building Society | ||
| Sumitomo Mitsui Trust Bank Ltd | ||
| Swansea Building Society | ||
| T C Ziraat Bankasi | ||
| Tandem Bank Ltd | ||
| TD Bank Group | ||
| Teachers Building Society | ||
| Tesco Bank | ||
| The Bank of East Asia Limited | Previously Bank of East Asia Ltd | |
| The CTB Finance plc | ||
| Tipton & Coseley Building Society | ||
| Triodos Bank UK Ltd | ||
| TSB Banking Group and Subsidiaries (TSB Group) | TSB Banking Group, TSB Bank plc, TSB Scotland Nominees Ltd, TSB Scotland (Investment) Nominees Ltd. | |
| Turkish Bank (UK) Ltd | ||
| Turkiye Is Bankasi AS – London Branch | ||
| UBS AG | ||
| UniCredit Banking Group | ||
| Union Bancaire Privée UBP SA | ||
| Union Bank of India (UK) Ltd | ||
| Union Bank UK plc | ||
| United Bank for Africa (UK) Ltd | ||
| United National Bank Ltd | ||
| United Overseas Bank Ltd | ||
| United Trust Bank Ltd | ||
| Unity Trust Bank plc | ||
| Vanquis Banking Group | Previously Provident Financial Group | |
| Vernon Building Society | ||
| VTB Capital plc | ||
| Weatherbys Bank Ltd | ||
| Wells Fargo & Co | ||
| Wesleyan Bank Ltd | ||
| West Bromwich Building Society | ||
| Western Union International Bank Gmbh | ||
| Westpac Banking Corp – London | ||
| Woori Bank – London Branch | ||
| Wyelands Bank plc | ||
| Yorkshire Building Society | ||
| Zenith Bank (UK) Ltd | ||
| Zopa Bank Ltd |
Banks that are no longer adopters of the Code
| Principal name | Adoption includes | Comment |
|---|---|---|
| Industrial and Commercial Bank of China Ltd ICBC | - | ICBC Ltd London Branch and Industrial and Commercial Bank of China Ltd ICBC were in previous periods erroneously shown as two separate adoptions rather than a single adoption. Duplicate entry has been removed. |
Annex B: Banks that had not adopted the Code at 31 March 2023
The list is drawn from banks that HMRC know to be in the bank levy population (ignoring the £20 billion threshold) and banks on the list of Banks and Building Societies at 31 March 2023 as published by the Prudential Regulatory Authority.
List of non-adopters as at 31 March 2023
- AlbaCo Limited
- Ashman Bank Limited
- Bank North Limited
- BGC Brokers LP
- Cantor Fitzgerald Europe
- Fiinu Bank Limited
- FinecoBank SPA
- Griffin Bank Limited
- Perenna Bank plc
- Streambank plc
- The Bank of London Group Limited
-
As defined in Section 285(4)-(6), Finance Act 2014. ↩
-
The Business Risk Reviews are reviewed after the reporting period and confirmed with CCMs to provide assurance over their code compliance. ↩
-
The Governance Protocol has 4 levels of escalation. The first level of escalation is to directors of HMRC and board level of the bank. HMRC’s process for dealing with concerns is set out in detail at BKM506100 to BKM506900 of the guidance. ↩
-
A bank will only be included in this category where Senior Civil Servants in HMRC’s Large Business and Business, Assets and International directorates have given approval to discuss the concerns with the bank. ↩
-
A bank will only be included in this category when the case has been considered by the Tax Disputes Resolution Board and the Board have concluded that the bank has breached the Code. ↩