HSBC accused of helping clients dodge millions in tax
In February 2015 it was reported by the BBC that HSBC helped wealthy clients across the world evade hundreds of millions of pounds worth of tax.
BBC's Panorama had seen accounts from 106,000 clients in 203 countries, leaked by whistleblower Herve Falciani in 2007. The documents included details of almost 7,000 clients based in the UK.
The French authorities had already concluded in 2013 that 99.8% of their citizens who were on the list were probably evading tax. The thousands of pages of data were obtained by the French newspaper Le Monde. In a joint investigation, the documents have now been passed to the International Consortium of Investigative Journalists, the Guardian newspaper, Panorama and more than 50 media outlets around the world.
HM Revenue and Customs (HMRC) was given the leaked data in 2010 and identified 1,100 people from the list of 7,000 British clients who had not paid their taxes. But almost five years later, only one tax evader has been prosecuted. HMRC said £135m in tax, interest and penalties have now been paid by those who hid their assets in Switzerland out of more than US$20bn estimated to have been banked by customers with UK addresses.
But the chairwoman of the Public Accounts Committee, Margaret Hodge MP, said: "I just don't think the tax authorities have been strong enough, assertive enough, brave enough, tough enough in securing for the British taxpayer the monies that are due."
HSBC did not just turn a blind eye to tax evaders - in some cases it broke the law by actively helping its clients.
In one example, the bank gave one wealthy family a foreign credit card so they could withdraw their undeclared cash at cashpoints overseas.
HSBC also helped its tax-dodging clients stay ahead of the law. When the European Savings Directive was introduced in 2005, the idea was that Swiss banks would take any tax owed from undeclared accounts and pass it to the taxman. It was a tax designed to catch tax evaders. But instead of simply collecting the money, HSBC wrote to customers and offered them ways to get round the new tax. HSBC denies that all these account holders were evading tax.
HSBC admitted that it was "accountable for past control failures." But it said it had now "fundamentally changed". "We acknowledge that the compliance culture and standards of due diligence in HSBC's Swiss private bank, as well as the industry in general, were significantly lower than they are today," it added.
HSBC said it is "co-operating with relevant authorities".
The bank is facing criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.
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