Lloyds faces Revenue inquiry over tax advice

Published on Monday 21 September 2009 21:35

TAX officials are understood to be investigating allegations that wealthy clients of Lloyds Banking Group are being encouraged to avoid UK taxes by channelling money through China.

The BBC said that an employee at the Jersey branch of the bank was secretly filmed – as part of a Panorama investigation – giving the advice to a man posing as a client with 4 million to invest.

Lloyds, which received a multibillion-pound government bail-out last year, yesterday denied any wrongdoing and said it would not comment on the actions of an individual employee.

Dave Hartnett, permanent secretary at HM Revenue and Customs, told the BBC that the advice was "incredibly irresponsible". HMRC is understood to be investigating the incident after the BBC handed over its footage.

The Panorama investigation into off-shore banking also looked into Northern Rock, which was bailed out with 27 billion of taxpayers' money at the start of the banking crisis in 2008.

A banker from Northern Rock in Guernsey told the programme's undercover customer that he could avoid European Union tax rules by opening an account in the name of a non-trading company.

The banker said the customer should inform the Inland Revenue, but the BBC claimed the bank itself keeps the details secret from the taxman.

Northern Rock denied its subsidiary is behaving inappropriately and said it informs and reminds all account holders that they are responsible for declaring the interest earned from their savings to their relevant tax authority.

&#149 Halifax, now part of Lloyds, is set to become the latest bank to reduce the fees it charges customers who go overdrawn without permission. It is reducing its charges from 35 for each payment made while the customer is in the red without arranging an overdraft, to 5 per day, with fees for people who agree an overdraft starting at just 1 day.