• Pin It
  • Pin It

Report: HSBC helped clients dodge tax

Feb 09, 2015, 2:54 AM EST
HSBC is Britain's biggest bank.
AFP/Getty Images

Britain's biggest bank helped wealthy clients cheat the U.K. out of millions of pounds in tax, reports the BBC. Panorama has seen thousands of accounts from HSBC's private bank in Switzerland leaked by a whistleblower in 2007. They show bankers helped clients evade tax and offered deals to help tax dodgers stay ahead of the law.

HSBC admitted that some individuals took advantage of bank secrecy to hold undeclared accounts. But it said it has now "fundamentally changed".

The documents, stolen in 2007 by a computer expert working for HSBC in Geneva, contain details of more than 100,000 clients from around the world.

Offshore accounts are not illegal, but many people use them to hide cash from the tax authorities. And while tax avoidance is perfectly legal, deliberately hiding money to evade tax is not.

The French authorities assessed the stolen data and concluded in 2013 that 99.8% of their citizens on the list were probably evading tax.

"We acknowledge and are accountable for past compliance and control failures," HSBC said on Sunday after news outlets including French newspaper Le Monde and Britain’s The Guardian published allegations about its Swiss private bank.

The Guardian, along with other news outlets, cited documents obtained by the International Consortium of Investigative Journalists (ICIJ) via Le Monde. HSBC said that its Swiss arm had not been fully integrated into HSBC after its purchase in 1999, allowing "significantly lower" standards of compliance and due diligence to persist.

The Guardian alleged in its report that the files showed HSBC's Swiss bank routinely allowed clients to withdraw “bricks” of cash, often in foreign currencies which were of little use in Switzerland, marketed schemes which were likely to enable wealthy clients to avoid European taxes and colluded with some to conceal undeclared accounts from domestic tax authorities.

HSBC said the Swiss private banking industry, long known for its secrecy, operated differently in the past and this may have resulted in HSBC having had "a number of clients that may not have been fully compliant with their applicable tax obligations."

YOU MIGHT ALSO LIKE