BoE set to investigate HSBC tax-dodging claims

Whistleblower Herve Falciani sent e-mail to HMRC in 2008. Picture: Getty
Whistleblower Herve Falciani sent e-mail to HMRC in 2008. Picture: Getty
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THE Bank of England’s Prudential Regulation Authority could look in to allegations of tax avoidance at HSBC’s Swiss subsidiary, deputy governor Sir Jon Cunliffe has indicated.

Sir Jon said the PRA was “not yet” at the stage of investigating HSBC, but that the allegations could be “of relevance” to the authority, which has responsibility for protecting the stability of the UK financial system by regulating the soundness of companies in the financial services sector.

He said that the allegations raised “serious issues around HSBC’s conduct” and made clear that the PRA would expect senior management to be responsible for the culture and operations of all parts of their groups.

His comments, made yesterday, came as it emerged that the government had previously issued guidance that UK nationals with Swiss bank accounts were “highly unlikely” to face criminal investigation for past tax-related offences if they made a one-off payment or voluntary disclosure of their assets to HM Revenue and Customs (HMRC).

Yesterday Sir Jon said: “I think the allegations raise serious issues around HSBC’s conduct.

“We’d expect the management, the leadership of a large group, to be able to ensure that there is a culture, and the operations within that group, to manage those sorts of risks.

“I wouldn’t comment on the case because we are not at that stage yet, but this is certainly something that could be of relevance to us.”

Meanwhile the former director of public prosecutions, Sir Keir Starmer has criticised the UK government guidance that British citizens with Swiss bank accounts were unlikely to be prosecuted for tax evasion if they co-operated with the authorities.

Sir Keir, now a Labour Party parliamentary candidate, said the guidance issued in January 2013, following the signing of a UK-Swiss tax co-operation agreement, had come just as he was seeking to drive up prosecutions for tax evasion.

The guidance states that provided an account holder makes either a one-off payment or a voluntary disclosure in relation to their relevant assets and fully co-operates with HMRC, “that person is highly unlikely to be subject to a criminal investigation by HMRC for a tax-related offence for past liabilities”.

Sir Keir said that he had not been aware at the time of the guidance.

“I don’t think coming clean, paying debts, should be a reason not to be criminally prosecuted. I think indicating that it is highly unlikely that someone will be prosecuted or investigated is to send the wrong signal,” he said.

“Certainly it is interesting that at the time – 2012-13 – I was making public statements saying that we should drive up the number of prosecutions for tax evasion. Cases should be investigated properly using all the tools at our disposal and then a decision made as to whether they have passed the criminal threshold.

“I think the default position now has to be criminal proceedings. That has to be absolutely clear.

“We are making the mistake of treating this in some way as if it is not a fraud and not a criminal offence. We should treat this in the same way as any other fraud.”

Earlier, details emerged of an e-mail which whistleblower Herve Falciani says he sent HMRC in 2008, offering to provide information about clients at a private bank based in Switzerland.

The unsigned email, apparently sent to an HMRC inquiries address and now published by French newspaper Le Monde, reads: “I have the whole list of clients of one of the world top five private banks. 1) This bank is based in Switzerland. 2) I’m also granted to access to the information system.”

Mr Falciani, an IT worker at the bank, later passed secret information about HSBC Suisse accounts to French tax authorities, sparking a massive investigation in to allegations of tax avoidance and evasion.

HMRC has said it has no record of receiving an email or phone call from the whistle-blower in 2008.

It received files relating to UK residents from the French authorities in 2010, and has used the information to pursue around 1,100 individuals and organisations, securing £135 million in tax, penalties and interest payments and one criminal conviction.