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HSBC execs apologise for Swiss practices

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26th Feb 2015
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The chairman and chief executive at HSBC have said sorry for "unacceptable" practices at its Swiss private bank, which allegedly helped rich customers evade tax.

Stuart Gulliver, group chief executive, appeared before the Treasury Select Committee yesterday. He said the tax scandal had damaged trust and confidence in the company, but said he was cleaning it up by reforming its structure and improving measures to detect money laundering and tax evasion.

Douglas Flint, group chairman and formed FD of HSBC also appeared before the Committee to answer questions about the recent tax scandal at HSBC.

Gulliver told MPs that the Panama company he created for his salary to be paid into via a Swiss bank account in the late 1990s did not have any tax advantages. 

He said it was to keep his salary private from colleagues.

Gulliver, who is a registered as a non-domcile, added that he had paid full UK taxes on his HSBC earnings. He said he had followed "the letter of the law" for non-domicile rules and paid a "fair amount" of tax.

Former KPMG man Flint said he paid all his tax and found it "abhorrent" that other people don't. 

He said he shared responsibility for failings at HSBC's Swiss bank but refused an MP's suggestion that he should take personal responsibility for it.

He declined to comment on a claim by an MP on the committee that HSBC had promoted "aggressive" tax avoidance through its involvement in the Eclipse 35 film tax scheme but added that "we wouldn't do it today."

HMRC was also before the Select Committee. Chief Lin Homer defended its approach to tackling tax evasion and avoidance through a mixture of tax amnesties, penalties and criminal prosecutions.

Homer told the committee that the investigation into tax evasion by Britons with Swiss bank accounts at HSBC was hampered by the poor-quality of data leaked in 2010, restrictions on how it could use the data and a lack of co-operation from other governments.

“For those that owed tax … pursuing prosecutions against organisations in different jurisdictions was difficult without corroborating evidence to make prosecution stick,” Homer said.

But criminal investigations may get easier following an agreement this week between HMRC and the French authorities, she added.

MPs heard that that HMRC was still investigating about 100 cases from the leaked bank account list but did not expect many more successful criminal prosecutions.

HMRC said it will next week meet the SFO, FCS, CPS, City of London Police, NCA and EuroJust to discuss how the Swiss data can be used.

In addition, HMRC confirmed today that the HSBC Suisse bank data can now be shared. 

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Replies (7)

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By Donald6000
27th Feb 2015 11:40

HMRC Just are not going after it

HMRC is becoming a conduit for non payment of tax; this is quite obvious having got rid of all their staff who could possibly have knowledge of how to tackle large scale and aggressive avoidance.

 

If they could do tax collection from individuals who had done this sort of thing, then obviously it would do but as it is not doing so, one can only conclude that this is an act of policy and the constant denigration of it by the TSC is also some weird sort of stage play to make it look as if Parliament is somehow interested. It is not.

 

In short, there is a lot of gamesmanship going on. They need either to all of them get into a concerted effort to do something, or just shut up and get out of it altogether until the will is found to do what is morally and ethically correct.

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By chatman
27th Feb 2015 11:41

Where's Swiss Toni when you need him?

I want to know what Swiss Toni has to say about all this.

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By redboam
27th Feb 2015 12:26

HMRC?

Saying sorry is all very well but as actively enabling tax evasion on an epic scale must surely be an offence will HMRC be taking action? If instead we get something along the lines of the £20 million Goldman Sachs sweetheart deal then it will be clear that normal service will have been resumed, namely that the smaller you are the harder you fall.

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By User deleted
27th Feb 2015 14:18

Confused about Mr Gulliver’s Non-Dom status …

Mr Gulliver’s father doesn’t seem to have been born abroad and neither does he himself

Grammar school in Devon and studied law at Oxford university – moved to HK in 1980

HSBC seems to have suggested his Non-Dom status arose because of his spending the “majority of his near 35-year career at HSBC in Hong Kong”

Mr Gulliver seems to have lived in the UK for more than a decade and has had his children educated here -

http://www.thetimes.co.uk/tto/business/industries/banking/article4365861.ece

So all in all should he really be a Non-Dom

Can someone help out here with an explanation – because this seems to be questionable. It’s not about returning to HK on completion of his assignment in the UK because we could all pull that one with an artificial company in HK posting use to the UK for the whole of our life – of course ones intention could be to return to HK after the posting but ….

An artificial arrangement – especially after 10+ years resident in the UK – taking the p****

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By Donald6000
27th Feb 2015 13:48

Non dom

Regarding the correspondence above, of course he should not be a non dom. Residence and non residence used to be one of the Revenue's areas of expertise. Now all of a sudden they are allowing people to be non dom who have pretty obvious connections with the UK.

 

I take it the HMRC are having a second childhood. They need to man up.

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By markabacus
27th Feb 2015 17:31

So who is going to jailed?

So HSBC staff have assisted some of their clients to EVADE tax. So how many of them are going to go to jail?

A daft question really as I'm sure the answer is nobody a usual.

So no deterrent, so when the dust has settled they'll no doubt resume where they left off

A real insult to those who pay their dues to keep this country going while others rip us all off

 

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By AndrewV12
18th Mar 2015 09:58

A Bank has apologised, who's next and when.

A bank has apologised for allegedly helping rich customers evade tax, who will be next and more to the point when.

 

Accountancy firm PricewaterhouseCoopers (PwC) has deceived parliament and is facilitating and promoting “industrial scale” tax avoidance, MPs warned in a report.

The report, conducted by Britain’s Public Accounts Committee (PAC), found the company's tax arrangements bear all the hallmarks of “a mass-marketed tax avoidance scheme.”

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