HMRC has ended its inquiries into allegations that HSBC’s Swiss bank helped wealthy clients evade tax and admitted it is unlikely to pursue further prosecutions against the bank.
Dame Lin Homer, the outgoing boss of HMRC, told the Public Accounts Committee yesterday that “it is unlikely there will be prosecutions” over allegations British customers of HSBC Suisse used the bank to evade tax. She said the data had been reviewed but there was no base for criminal action.
During the hearing, Simon York, director HMRC’s fraud investigation service, admitted that the tax authority did not have a “current criminal investigation” in relation to any entities connected with files – first passed to HMRC six years ago – that showed how the bank had helped its wealthy clients evade tax.
The admission comes days after the Financial Conduct Authority announced it would not take any formal action against the bank and prompted Stephen Phillips, a Conservative member of the committee, to complain the bank had been allowed to get away “scot free”.
“I – and I suspect most Members of Parliament – would find it extraordinary that a bank that is domiciled in this jurisdiction with oversight of its Swiss subsidiary has not had action taken against it either by its regulator or by you who are responsible for investigating it and passing papers to the crown prosecution service, to conduct criminal prosecutions if appropriate,” Phillips said.
The story first emerged in 2008 when HSBC whistleblower Hervé Falciani stole data from the bank’s Geneva office and attempted to contact HMRC by e-mail.
HMRC has always maintained it had no record of any contact from Falciani, but once the scandal broke, used the data to identify around 1,100 people who had dodged their tax liabilities.
That evidence was used to find property millionaire Michael Shanly guilty of tax evasion, after he held his late mother’s money in an offshore account and chose not to disclose it to HM Revenue & Customs. Eventually, he pleaded guilty and was hit with an £800,000 bill. His was the only successful prosecution to have followed the data.
Homer, who controversially received a Damehood in the New Year’s honours list, was forced to defend her department’s heavily criticised customer service record after she daid 81% of calls to HMRC were answered within six minutes.
“I think a lot of the time it’s extremely good but some of the time it’s not,” said Homer. “When you deal with 45 million customers there will always be some that you do fail and there will be times of day and times of week that will not be good as others, but we are improving that service.”
“One of the ways that we think that we can make it better in the future is to allow the more routine questions (via online services). This will allow customers greater choice about what they do, but whilst we are moving to give that choice, it is important that we improve services as much as possible.”
Committee expresses concern about costs to businesses and April 2018 implementation date
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
Top 25 firm HW Fisher & Co has acquired London firm Rhodes & Rhodes
Top Ten firm RSM has appointed Nick Blundell as its head of corporate tax in Birmingham