HSBC 'helped clients evade taxes'

HSBC tax evasion claims
New Reports Show HSBC Helped Clients Dodge Taxes

Senior politicians and HM Revenue & Customs have been accused of failing to act over claims that HSBC helped clients dodge millions of pounds in taxes.

A furious blame game is under way between the Tories and Labour after a huge trove of files on secret Swiss accounts run by the bank were leaked.

The documents have already sparked criminal probes in several countries and attempts to claw back cash after being stolen by an IT worker in 2007 and passed to French authorities.

Now the details of 30,000 accounts holding almost £78 billion of assets are being revealed after they were obtained by a French newspaper and analysed by a team of investigative journalists.

They are reported - by BBC's Panorama and the Guardian - to include evidence that the bank colluded with some clients to hide accounts from tax authorities in their home countries.

Among those alleged to have been exposed as having accounts with the Swiss arm of HSBC are said to be politicians, sports stars and celebrities as well as criminals and traffickers.

Holding a secret bank account is not illegal but they have been used by some to deliberately conceal assets in order to dodge tax, which is against the law.

The BBC said the documents include details of almost 7,000 British clients.

HMRC, which was passed the data in 2010, has clawed back £135 million from some of the 3,600 Britons identified as potentially avoiding tax using the Geneva branch of HSBC.

Only one prosecution has been brought.

Public Accounts Committee (PAC) chair Margaret Hodge said Lord Green, who ran HSBC during the period and was appointed trade minister in 2010, faced "serious questions". The peer stepped down from the Government post at the end of 2013.

"Either he didn't know and he was asleep at the wheel, or he did know and he was therefore involved in dodgy tax practices," the Labour MP told BBC Radio 4's Today programme.

"Either way he was the man in charge and I think he has got really important questions to answer."

Mrs Hodge said HMRC had not been sufficiently determined in tackling dodgy practices. "You are left wondering, as you see the enormity of what has been going on, what it actually takes to bring a tax cheat to court," she told BBC Radio 4's Today programme.

"If it had been a benefit cheat it would have been up for court years ago. Now we have had only one tax cheat taken before the British courts."

Mrs Hodge said countries such as the US, France and Argentina were taking action against HSBC over its activities. "We are never assertive enough, aggressive enough and I think just determined enough to actually protect the taxpayer," she said.

"It makes me really frustrated that we have our tax authorities facing both ways. On the one hand, they are all part of the establishment, we want to look after them, on the other hand not defending really the taxpayer's interest."

City Minister David Gauke insisted he "was not aware of any evidence" that Lord Green had been involved in any of the activity.

"Clearly HSBC have got questions to answer," he told Today. "In terms of Stephen Green, I don't think there is any suggestion or any evidence that he was involved or engaged in some of the behaviour that occurred in the subsidiary in Switzerland.

"The regulators have not found that was the case. Indeed I think there is a view that Stephen Green was to some extent clearing up a mess."

Mr Gauke said the system was now far stronger - and pointed out that shadow chancellor Ed Balls had been in the Treasury when behaviour was at its worst.

"I do have to make the point that there was a lack of grip in this area and a lack of progress in dealing with tax cheats," he told BBC Breakfast.

"In particular that era, 2005-2007, tax avoidance schemes were prevalent, it was very common for people to hide assets off shore.

"I think there are questions to be answered by the likes of Ed Balls, who was City Minister at the time, what was he doing to deal with this type of behaviour and tax evasion by British residents?"

10 things your bank doesn't want you to know
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HSBC 'helped clients evade taxes'
Once you have opened a current account with a bank or other lender, you will get a steady flow of emails, letters (and maybe phone calls) offering you a savings account, loan, mortgage, ISA etc to go with it. But while it may be tempting to have everything in one place, it's better to do the legwork and shop around for the best financial products. You can compare interest rates on loans and savings accounts in the 'best buy' tables in the newspapers, or look online on comparison sites. Remember you can still easily transfer your money between accounts, even if they are not with the same financial institution. 
Whether you want to apply for a new mortgage or refinance an existing one, your bank will probably be very happy to give you an instant quote in the hope that you will go with them. They may not tell you that you can shop around at other lenders. A mortgage broker can give you an overview of the best interest rates on offer, and might be able to cut you an even better deal him/herself. 

Want to cash in your jars of change that are sitting on your shelves at home? Many banks are not very keen on coins. They often only take it from their own customers. You will have to sort it into different denominations and put the coins in the bank's bags in set amounts (for example, £1 for coppers, £5 for silver, etc). Some banks only take a limited number of bags a day, or won't take any at busy times. Others take a different view: HSBC has free coin deposit machines in many larger branches where you pour your jar of coins into the machine and it counts them and automatically credits your account. Barclays, NatWest and RBS also have machines in large branches in city centres.

Bank employees now have a duty to point out that they only advise on the bank's products and don't offer independent financial advice. What they won't tell you is that even the advice they give you about the bank's own products should be treated cautiously. Bank staff are often undertrained, underpaid and overworked. (You could ask for the employee's qualifications before getting advice.) So do your own research and/or find an independent financial adviser.

Nothing is set in stone. Your bank won't tell you this, but sometimes it will waive a fee, for example an overdraft or an ATM fee, depending on the circumstances. You have nothing to lose by asking, if you can argue persuasively why they should waive the fee. Citizens Advice says your bank should treat you sympathetically if you can show financial hardship.

As stated in the previous slide, some things are negotiable – such as interest rates or waiving fees – if you can make a good case for it. In that instance, talking to an employee in person is better than filling in a form online.

If your account is overdrawn and you get paid, your bank could use this money to pay off your overdraft without your permission. However, you have a right to ask them not to do this so you can pay your rent or mortgage first. This is called first right of appropriation. You have to ask your bank in writing, and you'll need to write to them with new instructions every time money gets paid into your account. Make sure you write 'first right of appropriation' in your letter.

If money is mistakenly credited to your account, your bank or building society can recover the money, assuming they do this within a reasonable time. But you may be allowed to keep the money, for example if you didn't realise the bank had made a mistake and spent the money in good faith. You would have to prove that you spent it in such a way that it would be unfair to ask you to pay it back. You can complain to the Financial Ombudsman if you think your lender is being unfair in asking you to repay the money.

If you do have to pay it back, you could try to reach an agreement with your bank to pay it back in instalments without interest being added.

The Financial Ombudsman Service has more advice on what happens when payments have been credited to the wrong account. If you did something wrong - for example, by entering the wrong account number - rather than the bank, the Financial Ombudsman may still uphold your complaint. They consider whether the financial institution made it clear to the consumer that only the bank sort code and account number are used to process the payment, rather than the name of the payee. They will also ask whether the lender should have realised that the consumer had made mistake, and once the problem came to light, did the firm take reasonable steps to try to get the money back from the recipient.

If too much is deducted from your account, your lender may have to refund the full amount of the payment. For example, if the money is taken through a direct debit or credit card payment for a hotel room or car rental. When deciding whether the debit was reasonable, the bank or building society will take into account your previous spending pattern. But the bank doesn't have to refund the payment if you agreed the amount beforehand or were informed of the payment by your lender at least four weeks before.

If you don't have enough money in your account to cover a direct debit payment, your bank may not make the payment. It doesn't have to tell you that the payment hasn't been made, so the onus is on you to keep checking your account. If, on the other hand, the payment goes through, you may be charged for an unauthorised overdraft.


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