Bloomberg News

U.K. Extends Probe of HSBC Geneva Account Holders, HMRC Says

October 13, 2011

Oct. 13 (Bloomberg) -- The U.K. tax authority said it will write to HSBC Holdings Plc account holders in Geneva suspected of failing to report all their income and gains.

Her Majesty’s Revenue and Customs said it’s acting on information on about more than 6,000 individuals, companies, trusts and other bodies received last year under a tax treaty.

“The net is closing on offshore evaders,” Dave Hartnett, the head of the revenue department, said in a statement today. “Come forward to us and make a full disclosure.”

About 800 customers have already been sent so-called Code of Practice 9 letters informing them that their tax affairs over the past 20 years will be probed, two people familiar with the matter told Bloomberg News in September.

HSBC’s private bank in Geneva suffered an outflow of money in 2009 after becoming aware of a data theft in the middle of 2008. The French government has used the data stolen by technician Herve Falciani to search for tax dodgers and passed information on to at least three other European governments.

The U.K. last week signed an agreement to settle a dispute over tax evasion by wealthy Britons holding offshore accounts with Swiss private banks. The settlement, which requires the approval of parliaments in both countries, follows a similar accord between Germany and Switzerland, and introduces a new levy on U.K. account holders wishing to remain anonymous. U.K. clients of Swiss banks can alternatively declare their tax liabilities through the Liechtenstein Disclosure Facility.

“We’ve got some of the people who’ve already been issued with a Code of Practice 9 notice,” said Dawn Register, a tax adviser at BDO Stoy Haywood in London. “If individuals are already under investigation by HMRC, they’re stuck. For others, the best option may be disclosure.”

Lisa Baitup, a London-based spokeswoman for the bank, declined to comment on HMRC’s investigation. “HSBC doesn’t condone tax evasion,” she said.

--With assistance from Gonzalo Vina in London. Editors: Keith Campbell, Dylan Griffiths.

To contact the reporters on this story: Giles Broom in Geneva at gbroom@bloomberg.net

To contact the editor responsible for this story: Frank Connelly in Paris at fconnelly@bloomberg.net


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