Appearing before a panel of MPs yesterday, HMRC chief executive Lin Homer was criticised for not actively seeking out information on thousands of undeclared bank accounts held within HSBC’s Swiss private banking arm, even after the data entered the public domain.
“One of my feelings of anger with you is you sit there and expect it to come to you; you don’t go out and police the way you should do,” said chairman of the Public Accounts Committee, MP Margaret Hodge. “I can’t begin to understand your pathetic response.”
Homer disputed this, saying HMRC is “proactive” about finding necessary information.
“All of the anger is based on the assumption that we have not received the data and acted on it, but we have,” she said. “There was little information over and above what we know. We have identified those people who owe us money and pursued them.”
HMRC recovered £135m (€182m, $205m) in tax after contacting around 6,000 supposed evaders when information was leaked in 2010 via the French authorities.
“Ignored the information”
However, the committee insisted that HMRC had not known the full facts until last week, arguing that the Revenue had previously ignored the information when it was offered by the BBC’s Panorama programme in 2013. MP Stephen Phillips said: “This was a big chunk of information and you either didn’t want it or you didn’t ask for it.”
Hodge said: “This is the first time in this committee where we have seen serious allegations – not of tax avoidance but evasion. It makes me believe you are not serving the British taxpayer.”
She quizzed HMRC on whether the bank’s knowledge of undeclared bank accounts meant it was facilitating tax evasion and avoidance, but Homer said she could not give a yes or no answer on a matter of criminal law.
“Risk worth taking”
MPs also pointed out that only one UK tax evader had ever been prosecuted, thus giving citizens reason to believe having an undeclared Swiss bank account is “a risk worth taking because HMRC will let you get away with it”.
Phillips said only one prosecution “does exactly the opposite” of deterring people from evading tax. “I’m horrified when you prosecute an individual for tax it can take 44 months to process,” he said.
However, Homer argued that successful prosecutions rely on having sufficient evidence and explained that the final decision is in the hands of the Crown Prosecution Service.
When asked whether HMRC was going to take action against HSBC, Homer said it would widen its enquiries and involve other UK authorities in the investigation.
