Revelations of large scale tax evasion facilitated by banking group HSBC should embarrass more than just the bank and individuals concerned. The Swiss authorities ought to blush at their decision to prosecute whistleblower Hervé Falciani rather than ask questions of their banking culture. Many may also query the UK government’s appointment of ex-HSBC boss Stephen Green as trade minister in 2011.
But the toughest grilling should be saved for Britain’s HM Revenue & Customs. Like other EU tax authorities, they have long known the identity of thousands of Swiss bank account holders. Their first reaction was to maximise the funds to be recouped from any newly revealed tax evaders — understandably, since raising tax is the department’s raison d’être. But in the light of what is now known the question is whether HMRC were too lenient, and should have relied more heavily on criminal prosecutions of what appears to be blatant criminal activity.
It is not new for HMRC to be accused of leniency. Margaret Hodge, the feisty chair of the Public Accounts Committee, has charged it with losing its nerve in battles against corporate tax avoidance. She also accuses the government of being too willing to bargain with secret account holders, contrasting this with the harsh treatment meted out to those claiming too much benefit.
