The British government is close to a deal with the French authorities that will allow it to use previously leaked Swiss bank files to prosecute bankers and financial advisers, according to British chancellor of the exchequer George Osborne.
Tens of thousands of pages of data taken from HSBC's Zurich private banking arm by a whistleblower were given to London in April 2009 by France, but its use was restricted to chasing unpaid taxes.
However, Mr Osborne told the House of Commons the “terrible” agreement signed by the last Labour government was being renegotiated to ensure the information could be passed on to the serious fraud office and other prosecutors.
The Conservative-Liberal Democrats coalition is expected to include a new criminal offence of aiding and abetting tax evasion and aggressive tax avoidance in next month’s budget – the final one of the current parliament.
Meanwhile, HSBC chairman Douglas Flint and senior HM Revenue & Customs executives will appear before Westminster's influential treasury select committee tomorrow as it inquires into the conduct of the bank's Swiss arm.
Up to 100,000 clients received advice from the bank. Some 3,000 British names were given by whistleblower Hervé Falciani to the authorities after he stole the information in 2008.
Investigation
Since then more than 1,000 of the British names have been investigated by HM Revenue and Customs, leading to the payment of £150 million in taxes – though critics question the decision to prosecute only one person in court.
The conduct of HSBC dominated clashes in the Commons between Mr Osborne and Labour's shadow chancellor, Ed Balls, with Mr Balls widely regarded as having come off second-best in the exchanges.
Meanwhile, HSBC’s troubles continued yesterday when the UK-listed bank reported pretax profits of $18.7 billion last year, down 17 per cent from $22.6 billon for 2013 and significantly below expectations.
HSBC's top executives have come under pressure from shareholders, politicians and business leaders to waive some of their multimillion-pound bonuses, in response to recent allegations that the bank helped clients evade taxes, according to the Financial Times.
The company's chief executive, Stuart Gulliver complained that banks are now being held to "higher standards than the military, the church or civil service".
“Can I know what every one of 257,000 people is doing – clearly I can’t. If you want to ask the question could it ever happen again – that is not reasonable,” said Mr Gulliver, who has in the past been the world’s highest-paid banker.
Mr Gulliver, keeps his offshore income and capital gains out of the British tax net because he is domiciled for tax purposes in Hong Kong, even though his job is based in London.
However, the bank said: “Since being posted to the UK from Hong Kong in 2003, Mr Gulliver has paid full UK tax on the entirety of his worldwide earnings, less a credit for tax paid additionally in Hong Kong (where he is also tax resident) on that part of the same earnings doubly taxed.”The HSBC chief executive set up a Panamanian-registered company in 2007 to hold bonuses from the company because the bank’s IT system was then so insecure that top executives were able to find out how much others had got in bonuses.
“Absolutely nothing Stuart has done is anything other than legal, transparent and compliant. His tax affairs have always been transparent to me and to the board and there is no story here,” said the bank’s chairman, Douglas Flint.
