HSBC Helped Rich Customers Secretly Dodge Taxes, Report Says
A new report has emerged which says that the UK’s biggest bank, HSBC, has been assisting wealthy customers in a tax dodge scheme by setting up secret Swiss bank accounts. The Independent says the discovery found thousands of documents which revealed clients have been avoiding taxes to the tune of £135 million.
The report contains information on over 100,000 clients, which was unearthed by whistleblower Herve Falciani, who was also working for HSBC in Geneva in 2007. French authorities who analysed the data estimate that 99.8 percent of its citizens were engaged in tax dodges in 2013.
While the BBC – who first reported the discovery via their Panorama documentary series – say that using offshore bank accounts is not illegal, many customers use it as a means of dodging tax authorities, and while “tax avoidance is perfectly legal, deliberately hiding money to evade tax is not.”
HM Revenue and Customs (HMRC) were handed information in 2010 where it found that 1,100 of more than 7,000 British customers had either not paid enough tax or had hid it entirely in Swiss bank accounts.
HSBC have denied helping wealthy clients dodge their taxes and have said they are working with the authorities, but believe that some customers may have taken advantage of bank systems and secrecy.
“This resulted in private banks, including HSBC’s Swiss private bank, having a number of clients that may not have been fully compliant with their applicable tax obligations. We acknowledge and are accountable for past compliance and control failures.”
“We have taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards. HSBC’s Swiss private bank has reduced its client base by almost 70 percent since 2007.”
While HSBC claims to be doing all the bank can to help the investigation, The BBC says HSBC actively turned a blind eye or even helped clients avoid paying tax.
“The bank gave one wealthy family a foreign credit card so they could withdraw their undeclared cash at cashpoints overseas.”
Margaret Hodge MP, chairwoman of the Public Accounts Committee, believes that much of the blame should fall on the tax authorities in charge.
“I just don’t think [they] have been strong enough, assertive enough, brave enough, tough enough in securing for the British taxpayer the monies that are due.”
In addition to this latest tax dodge scheme, HSBC was also under investigation in 2012 when the bank was accused of a drugs and gun-running scandal. They were subsequently fined $1.9 billion for money laundering and tax evasion.