UK ‘CHEATED OUT OF MILLIONS’
Leaked files spark claims that stars and super-rich used HSBC to hide cash
HOLLYWOOD stars, music legends and prominent businessmen were yesterday revealed to have held secret Swiss accounts with HSBC – as the bank was accused of helping the superrich to avoid paying taxes.
Leaked bank files showed a virtual celebrity Who’s Who of thousands of wealthy customers who held secret accounts, including singers David Bowie, Tina Turner and Phil Collins and actress Joan Collins.
The files led to accusations that HSBC’s private banking arm had aggressively marketed Swiss accounts to its wealthiest customers, allowing some to hide millions of pounds in undeclared ‘black’ accounts and avoid paying taxes in their home countries.
The bank records – containing details of more than 100,000 customers worldwide, including 8,844 in Britain – were stolen in 2007 by Herve Falciani, a computer expert working for the bank in Geneva. Falciani, 43, said he took them as a ‘whistle-blower’ because he knew tax evaders were using the bank. He fled to France and gave the files to authorities there.
Last night’s Panorama programme on BBC1 said Britain’s biggest bank had helped some of its wealthy clients cheat the country out of millions of pounds in tax.
It is not illegal to hold a Swiss bank account but it is against the law to use a secret account to hide assets to avoid paying tax. There is no sugges-
‘He was asleep at the wheel’
tion of any wrongdoing by the celebrities named as holding accounts.
The revelations prompted a major political row yesterday after it emerged that the bank’s chairman at the time, Stephen Green, now Lord Green, was later appointed as a minister in David Cameron’s Government.
Singers Bowie, Turner and Phil Collins and Formula One star Fernando Alonso said they banked in Switzerland because they lived there. There is no suggestion any of them were involved in illegal tax practices.
Actress Joan Collins’s accountant said she co-operated fully with a 2011 HM Revenue & Customs check which found she did not owe any additional tax. Others named included Hollywood actor Christian Slater and footballer Diego Forlan. They did not respond to requests for comment. Lawyers for supermodel Elle Macpherson, another celebrity on the list, said: ‘Ms Macpherson is an Australian citizen who has accounted for UK tax on the basis of full disclosure in accordance with UK law.’
HSBC, which has its headquarters in London, said its Swiss arm was not fully integrated into HSBC after its purchase in 1999, allowing ‘significantly lower’ standards of compliance and due diligence. It said it had taken ‘significant steps’ to tighten security and introduce reforms. In a day of dramatic developments: Politicians accused each other and HMRC of failing to act over alleged tax evasion linked to the accounts.
Labour MPs demanded Lord Green face questions over his knowledge of alleged malpractice at the bank while he was chairman.
Shadow ministers called on the Government to say what checks were carried out before Lord Green’s appointment as a trade minister.
The Queen’s cousin Prince Michael of Kent and his wife were linked to one ‘inactive’ account. They deny any money was ever held in the account.
Tycoon Richard Caring visited a Geneva branch of the bank in 2005 and withdrew £2.25 million in cash; a transaction not flagged up by HSBC.
A friend of Prince Charles who was a guest at Prince William’s wedding to Kate Middleton was revealed to have invested millions.
HSBC admitted that some account holders had taken advantage of bank secrecy rules to hold undeclared accounts, but said it had ‘fundamentally changed’ its systems.
Customers were said to have withdrawn ‘bricks’ of cash from accounts in Switzerland, a tax haven, effectively allowing them to take the money into their home country without declaring it to tax authorities.
Officials at HMRC were given the leaked data in 2010 following an investigation in France and looked at about 1,000 cases, recouping £135 million in tax, interest and penalties.
But the chairman of the Public Accounts Committee, Labour MP Margaret Hodge, questioned the rigour of the HMRC investigation.
She said: ‘I don’t think the tax authorities have been strong enough, assertive enough, tough enough.’
She also raised questions about Lord Green’s knowledge of the scandal, saying: ‘Either he didn’t know and he was asleep at the wheel, or he did know and then he was therefore involved in dodgy tax practices.’
Lord Green declined to comment, telling the Guardian: ‘As a matter of principle, I will not comment on the business of HSBC, past or present.’
Former tax inspector Richard Brooks told Panorama: ‘I think they [HSBC] were a tax avoidance and tax evasion service. I think that’s what they were offering.
‘They knew full well that people came to them to dodge their tax liabilities.’ Alex Brummer and Comment – Page 14