FORMER HM REVENUE & CUSTOMS permanent secretary Dave Hartnett is to appear before the Public Accounts Committee this afternoon over the HSBC tax evasion scandal.
Hartnett, alongside the tax authority’s tax assurance commissioner Edward Troup, will face questions over why they failed to prosecute more of the bank’s offshore customers, in what is likely to be the committee’s last hearing before the general election. The committee, chaired by Margaret Hodge, has become notorious for its no-nonsense, abrasive tone taken with witnesses.
The furore centres on thousands of wealthy clients HSBC is said to have helped evade tax through its Swiss arm. As many as 100,000 customers are implicated, with between 6,000 and 7,000 UK-based.
Many British clients of the bank had failed to declare their holdings with HMRC, and while offshore accounts are not illegal, deliberately hiding money to evade tax is.
The story first emerged when HSBC whistleblower Hervé Falciani stole data from the bank’s Geneva office and attempted to contact HMRC by e-mail in 2008.
Committee chair Hodge is likely to criticise Hartnett for failing to act on the data, which has so far led to only one successful prosecution.
Hartnett left HMRC in 2012, and has since advised HSBC on financial crime matters and in 2013 took a consultancy role at Deloitte, working one day a week helping developing nations improve their tax regimes.
He has been heavily criticised over so-called ‘sweetheart’ deals struck with multinational companies during his tenure with HMRC. Notably in 2010, he agreed with investment bank Goldman Sachs to waive interest penalties of up to £20m on offshore bonuses paid to bank staff in order to settle a lengthy tax dispute.
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