TAX authorities have failed to serve British taxpayers’ interests in their response to the leak of a massive cache of data relating to secret Swiss bank accounts, a senior MP claimed yesterday.
Margaret Hodge, chair of the House of Commons public accounts committee, voiced her “anger” at HM Revenue and Customs for securing only one prosecution from a list of 6,800 UK-related accounts provided in 2010 by French authorities.
Ms Hodge said it appeared that activities related to the Geneva branch of HSBC’s Swiss subsidiary were “pretty outrageous”. She told HMRC permanent secretary Lin Homer that taxmen should have spoken to whistleblower Herve Falciani, who initially obtained the list while employed as an IT worker in 2007.
Ms Homer insisted HMRC staff had been “diligent” in their approach to the files, and said their record of securing one conviction and £135 million in unpaid tax, fines and interest compared well with other countries.
But Ms Hodge told her that the French tax authorities had recouped £200 million from 3,000 names, and the Spanish £180 million from 2,900.
She told the HMRC chief: “It’s pretty outrageous what was going on. It’s the first time in many of these leaks that there are really strong allegations not of egregious tax avoidance, but of tax evasion, and that is incredibly serious.
“For you to sit there and say, as you are doing, that, ‘We couldn’t get the money in in the same way as the French and Spanish did’ and ‘We didn’t litigate because we wanted to get the money in’ and yet you did worse on the money – it leaves me believing that you are not serving the British taxpayer.”
Responding to Ms Hodge’s comments, Ms Homer insisted: “That is absolutely not the case.”
She said some 300 staff, led by three directors, had sifted through data supplied by French authorities in 2010 and traced 3,200 individuals, including the 150 “most serious” cases which could be considered for criminal prosecution, 500 which were “more serious” but unlikely to meet the criminal threshold, and 400-500 which could be pursued for disclosure and settlement.
Ms Homer, who was appointed to lead HMRC in 2012, said she believed the authority would have told government ministers about the data within months of receiving it. “We are confident we will have told ministers that we were about to receive a big tranche of operational information,” she said. “We will have told people, including ministers, I suspect some time in the next few months,” she said.
HMRC had previously told the committee that it hoped to bring about 15 cases to prosecution, but in the event three were passed on to the Crown Prosecution Service, which decided to take just one to court.
“Prosecution is only one part of what we do. It is a very important part of the toolkit but we are after tax and changes in behaviour and we are after a deterrent,” Ms Homer said.
HMRC’s director general of enforcement and compliance, Jennie Granger, told the committee: “It is very difficult to prosecute from offshore. One of the challenges – and particularly in a situation when you have stolen data, which is what this is – is that you have to be able to prove those facts another way in order for the CPS to be able to take it forward.”
Ms Homer added: “We would have liked to have seen more prosecutions if we could have met the threshold.”
HMRC was “not very kindly at all” in reaching settlements with tax avoiders and evaders whose cases did not result in prosecution, requiring the payment of penalties and interest, she said.
Ms Hodge told the HMRC boss that tax authorities should have been seeking to speak to Mr Falciani and obtain a copy of his file as soon as its existence became known. In fact, the whistleblower said in 2013 that he had not been contacted by the UK tax authorities, and his offer to provide the files was not taken up, she said.
“One of my feelings of anger with you is that you sit there waiting for people to come,” said Ms Hodge. “You don’t go out and police in the way other authorities are doing and they are getting more money in and more litigation.”
But Ms Homer replied: “Your assertions are not true. We are very proactive. There is a suggestion that everybody else has been more proactive.”