Around 170 customers with Jersey-based HSBC accounts are set to be told to pay up to £20m by UK tax authorities.
Margaret Hodge, the chair of the House of Commons Public Accounts Committee, said at a hearing yesterday that this second data leak from the bank – when taken alongside a much larger one from Switzerland – in 2012 indicated that its use to duck tax could be “endemic”.
The forthcoming cash demands come amid a storm of controversy over the widespread use of the bank’s Swiss arm for alleged tax avoidance, and potentially evasion.
The existence of the Jersey leak – from a whistleblower – came to light back in 2012 and immediately sparked an HM Revenue & Customs investigation.
HSBC at the time had three separate units on the island. They were a retail bank dealing with the day-to-day banking needs of Jersey’s citizens; HSBC International, looking after expat Britons; and HSBC Private Bank Jersey.
A former member of staff told The Independent that there were “skeletons in the closet” dating from before the financial crisis.
HSBC sources also said that concerns about its operations by staff internally could at the time only be “escalated” up to an employee’s immediate manager. This meant they often got stuck in the system.
HMRC told The Independent that the Jersey data leak was “incomplete”, which would prevent it from securing enough evidence to obtain criminal convictions against suspected tax dodgers, but that it did expect to recover significant funds nonetheless.
It said: “Our risk assessment is that this data may help us recover £10m-£20m tax. The data was incomplete and old. This meant that there was insufficient information to develop potential criminal investigations. We believe the data to be around 10 years old. It also included those who had already disclosed their offshore accounts through earlier campaigns.
“We have given customers the opportunity to voluntarily disclose through the Crown Dependency Disclosure Facility [commenced April 2013]. Every Jersey financial institution was obliged to write directly to each of their customers to tell them about this disclosure facility. We are challenging about 170 who we believe pose the highest risk.”
The news of the Jersey funds could heighten pressure on HSBC over its apparent willingness to help wealthy clients avoid tax.
HMRC’s boss, Lin Homer, faced MPs on the select committee yesterday, where she was questioned on how her organisation has handled information handed over by the French authorities back in 2010.
Amid the mounting controversy, shares in HSBC slipped by 5.7p to 592.1p. Since its $1.5bn US fine for money laundering, the bank has ceased flag planting and sold a string of businesses. It has maintained that it now puts compliance above profitability and has reformed its processes and operations to reflect that, under changes introduced by the current chief executive, Stuart Gulliver.