HSBC Allegedly Aided Holder of Undeclared Accounts Evade UK Taxes

Feb 09, 2015 10:45 AM EST

An HSBC sign is seen outside a bank branch in London February 9, 2015. British bank HSBC Holdings Plc admitted on February 8, 2015 failings by its Swiss subsidiary, in response to media reports it helped wealthy customers dodge taxes and conceal millions of dollars of assets. REUTERS/Suzanne Plunkett

The Hong Kong & Shanghai Banking Corporation (HSBC) said on Monday that its procedures have been changed fundamentally, amid accusations that the global bank helped cheat the British Treasury millions of pounds in tax.

BBC reports that the largest bank in the UK had admitted that some of its clients held undeclared accounts while some bankers even offered deals to these account holders not only to evade taxes but also to stay steps ahead of the law.

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Those types of accounts are held in HSBC's private bank in Switzerland but were leaked by a whistleblower in 2007.

The leak was based on 106,000 clients in 203 nations seen by the whistleblower. Of the 106,000 clients, about 7,000 are based in Britain.

The files were obtained by joint effort of major media companies from different nations, such as the Guardian and BBC Panorama in Britain, Le Monde in France and the International Consortium of Investigative Journalists in the U.S.

Criminal investigations are ongoing against HSBC in the U.S., France, Belgium and Argentina as a result of the leak.

While the lender claims it is cooperating with relevant authorities, BBC reports that in the UK, there is no such action.

Labour MP for Birmingham Ladywood Shabana Mahmood, who has scheduled on Monday afternoon a session with the bank in the House of Commons on HSBC's tax avoidance, said, "We want to understand whether actually HMRC have been putting lots of cases before the Crown Prosecution Service (CPS) and it's the CPS who've been refusing to prosecute and those are questions that I hope that the government will answer."

The HMRC had the leaked data since 2010 and had identified 1,100 people in the country who evaded taxes.

But after five years, it has only prosecuted one account holder. But the tax agency said some of those investigated had paid it 135 million pounds of tax, interest and penalties.

HSBC insists that it has put in place several initiatives to prevent the bank from being used by people to evade taxes or launder money.

The lender said it now places premium on compliance and tax transparency over profitability.

TagsHSBC, tax evasion