Date
21 August 2017
HSBC broke the law by actively helping its clients evade paying tax, according to BBC Panorama. Photo: Bloomberg
HSBC broke the law by actively helping its clients evade paying tax, according to BBC Panorama. Photo: Bloomberg

HSBC helped clients dodge millions in tax: BBC report

HSBC, Europe’s largest bank, helped wealthy clients evade paying millions of pounds in tax, the BBC current affairs television program Panorama reported.

Panorama said the findings were based on thousands of accounts from HSBC’s private bank in Switzerland which were leaked by a whistleblower in 2007.

The documents show that bankers helped clients evade tax and offered deals to help tax dodgers stay ahead of the law, the report said.

HSBC admitted that some individuals took advantage of bank secrecy to hold undeclared accounts. But it said it has now “fundamentally changed”.

The documents, stolen by a computer expert working for HSBC in Geneva, contain details of more than 100,000 clients from around the world.

The documents 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.

The BBC noted that offshore accounts are not illegal, but many people use them to hide cash from the tax authorities. And deliberately hiding money to evade tax is illegal, it said.

The French authorities assessed the stolen data and concluded in 2013 that 99.8 percent of their citizens on the list were probably evading tax.

The documents include details of almost 7,000 British clients with many of their accounts not declared to tax authorities.

Britain’s HM Revenue and Customs (HMRC) has identified 1,100 tax evaders from the leaked data it was given in 2010. But almost five years later, only one tax evader has been prosecuted, the BBC said.

HMRC said 135 million pounds (US$205.8 million) in tax, interest and penalties have now been paid by those who hid their assets in Switzerland.

But MP Margaret Hodge, chairwoman of the Public Accounts Committee, said the taxman’s actions were not enough. 

“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,” Hodge was quoted as saying.

According to the BBC, HSBC broke the law by actively helping its clients evade paying tax. 

The bank gave one wealthy family a foreign credit card so they could withdraw their undeclared cash in certain locations overseas, the report said. 

Under a European directive issued in 2005, Swiss banks were supposed to take any tax owed from undeclared accounts and pass it to tax authorities.

But instead of simply collecting the money, HSBC wrote to customers and offered them ways to get round the new tax, the report said. HSBC denies that all the account holders were evading tax.

The bank now faces criminal investigations in the United States, France, Belgium and Argentina.

HSBC said it is “co-operating with relevant authorities”. But in the UK, where the bank is based, no such action has been taken.

The bank said it has completely overhauled its private banking business and has reduced the number of Swiss accounts by almost 70 percent since 2007.

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CG

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