FCA HSBC Tax Evasion Investigation

FCA HSBC Tax Evasion Investigation.

Following on from the Bank of England, HMRC, the Serious Fraud Office admitting they may be looking to investigate HMRC UK and Swiss Police entering HSBC’s offices in Geneva this week, the UK financial services regulator, the Financial Conduct Authority (FCA) has finally admitted that it is to investigate HSBC in the UK.

About time too.

There is an estimated $12billion of UK investor monies held in over 700,000 Swiss accounts for HSBC.  Add to this the French, Germans, Spanish, Italians et al, this represents huge tax evasion possibilities.

Comment

This is an utter scandal.  HMRC will have been supplied by bank account holder information for thousands of UK residents holding accounts across Europe under the Savings Directive (where all countries that have signed up to the directive effectively sharing bank account information across EU nation tax authorities.

Switzerland did not sign up to the directive but was pressured into applying a withholding tax that gradually increased from 15% to 35%.

That said, for a UK 40% and 45% tax payer or those receiving means tested benefits, it may be that even being taxed at Switzerland’s highest withholding tax rate on interest is still lower than being taxed in the UK or losing benefits.

HSBC are being accused of actively pursuing tax evasion by encouraging such accounts.  This is the crux of any investigation into HSBC.  Are the directors and managers all the way down the line, spreading into the culture of HSBC – are they fit and proper.

We suggest, yet again, the FCA and its predecessor the FSA, have either failed in the duty to act, were not competent to understand or act, or was it simply “jobs for the boys”.  It seems that almost every year, senior officials of the FCA/FSA leave to take up nice roles at large banking groups.

As ever, we ask the question: Who regulates the regulator?