11 Feb 2015

Ten questions for the HMRC chief on the HSBC scandal

The boss of HMRC Lin Homer faces a grilling in front of the Public Accounts Committee later today. If Channel 4 News had a seat at the table here’s 10 things we’d love to ask her.


When you received the data discs from the French authorities in 2010, did you personally review the material yourself?


If the answer to question one is yes, what did you think when you read the details describing – what appears to be – blatant criminal misconduct inside Britain’s biggest bank?


Did you personally agree to the restrictions that you, yesterday, told Channel 4 News in a statement (see below*) were imposed upon you by the French authorities? What was the reason given for these restrictions?


When you saw or learned of the potentially criminal goings on inside HSBC did you ever approach the French authorities and tell them the information was so serious it needed to be shared – at a minimum – with Britain’s banking regulators?


Was there no moment in the past five years when you thought you should have shared the information with the prime minister, the chancellor, the FCA, the SFO? Anyone at all? If not, why not?


On what basis were you allowed, under the French restrictions, to hand over some cases from the HSBC list for potential prosecution to the criminal prosecution service?


Did you ever recommend a criminal investigation – or any type of investigation – into the bank itself?


When news of the list of tax dodgers appeared in the media in 2010 and you made various public statements about your actions to go after individuals and prosecute them, did anyone from government or the FCA give you a call – or have their people give your people a call – to discuss what was going on?


As per your statement to us yesterday (see below*), why are you only now checking back with the French authorities and asking the investigative journalists in Washington DC – who had the same tax data as you – whether there is anything else you need to know?


What was Dave Harnett’s role in all of this? He was head of tax at HMRC at the time of the HSBC revelations. Do you not think it slightly strange and embarrassing that he went on to become a consultant for the bank when he retired in 2012? Did you think this was a wise move given HMRC was in the middle of investigating criminal activity inside the very same bank?

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*Statement given to Channel 4 News on Tuesday:

HMRC Chief Executive, Lin Homer, said:

“HMRC has a longstanding approach to tax evasion based on collecting the tax and interest due, changing taxpayer behaviour to discourage them from evading in future, and enforcing the most appropriate and effective penalties.

“This means providing disclosure facilities to encourage tax evaders to sort out their tax affairs, backed by civil penalties to fine them for the offence.

“The government has supported this approach by increasing investment in HMRC’s enforcement capacity, and by strengthening HMRC’s powers, including increasing the maximum civil fines for hiding money in tax havens to 200 per cent of the tax evaded.

“This approach has been very successful in tackling tax evasion – whether from plumbers, barristers and medics in the UK or from the wealthy hiding money in offshore accounts and there have been 57,000 disclosures under UK and international initiatives.

“Internationally, since 2010 HMRC has brought in around £2 billion in previously-unpaid tax as a result of our agreement with Switzerland on a withholding tax on Swiss Bank accounts and the international Liechtenstein Disclosure Facility.

“In a small number of cases, HMRC will institute criminal investigations into serial tax evaders and those who deliberately conceal information from us. But in most cases, disclosure and civil fines are the most appropriate and effective intervention, and that is how we have approached the receipt of data from leaks and whistleblowers, including the Swiss HSBC data that was shared with HMRC in May 2010.

“HMRC has systematically worked through all the HSBC data that we received. We received information about 6,800 entities which, after removing duplication, amounted to 3,600 businesses and individuals.

“HMRC challenged and settled more than 1,000 of these cases, bringing in more than £135 million in tax, interest and penalties. HMRC believes that the remainder of the cases are compliant, but we continue to monitor their activities.

“HMRC passed evidence on three individuals on the HSBC list to the Crown Prosecution Service, and the CPS considered that there was sufficient evidence to mount a successful prosecution in only one of the three cases.

“As far as we are aware, only handful of cases from the HSBC list have been brought by other countries for tax evasion and none has yet been brought for money laundering, so the UK is not out of step with our international partners.

“We are examining whether we have all the same data as the International Consortium of Investigative Journalists, and are asking the ICIJ for any data that we have not already been given.

“HMRC received the HSBC data under very strict conditions, which limited our use of it to pursuing offshore tax evasion and prevented us from sharing the data with other law enforcement authorities. Under these restrictions, we have not been able to seek prosecution for other potential offences, such as money laundering.

“The French authorities have today confirmed that they will provide all assistance necessary to allow HMRC to exploit the data to its fullest.

“Our powers to crack down on international evasion are being further strengthened by the new International Common Reporting Standards, which more than 90 countries have agreed to as an extra tool for closing down the options for tax cheats to pursue this increasingly high-risk practice.”

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