The boss of HM Revenue and Customs (HMRC) is to be grilled by MPs over allegations the department failed to act on tax evasion claims linked to HSBC’s Swiss subsidiary.
Permanent Secretary Lin Homer is due to give evidence to the Public Accounts Committee (PAC) this afternoon, following media reports that HSBC's private Swiss bank may have helped clients to avoid paying millions of pounds in tax.
HSBC, the UK's biggest bank, has admitted past failings by its Swiss subsidiary in response to the allegations. It denied that all the Swiss account holders had evaded tax and said it was "co-operating with relevant authorities".
BBC Panorama said it had seen thousands of documents from the company's Swiss subsidiary which showed that some clients were able to conceal money from HMRC.
The bank now reportedly faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK
Labour has demanded to know whether former chairman and chief executive Lord Green was asked how much he knew at the time of his appointment as trade minister in David Cameron's government.
And the party's Treasury spokeswoman Shabana Mahmood called on Chancellor George Osborne to say whether tax authorities were taking a "selective prosecution policy" towards the 6,000 cases passed to them by France.
HMRC was handed the information in 2010 but, although 1,1000 people in the UK were found to have not paid enough tax, only one has been prosecuted for tax evasion.
As a result of investigations by HMRC, some £135m in unpaid tax, interest and penalties have since been handed over by the British citizens involved, it is claimed.
A Downing Street spokeswoman initially said that neither Lord Green - who served as a coalition minister from 2011 to 2013 - nor any other member of the Government had "any knowledge that HSBC may have been involved in wrongdoing" in relation to its Swiss operation until the allegations were reported in the media over the past few days.
But she later acknowledged that she could not rule out ministers having read media reports about the scandal in the years since a huge cache of files relating to secret Swiss accounts was first passed to French authorities by an IT worker in 2007.
"We have no record that any government minister was made aware by HMRC officials that HSBC employees may have been involved in wrongdoing relating to its Swiss banking arm prior to the media reports in recent days," the Number 10 spokeswoman told a regular Westminster press briefing.
She said that when French authorities passed files to HMRC in 2010, they imposed restrictions on how the material could be used. The files have already sparked criminal probes in several countries and in 2011 then HMRC boss Dave Hartnett told a parliamentary inquiry that "the whole nation probably knows that our department has a disc from the Swiss - from the Geneva branch of a major UK bank - with 6,000 names, all ripe for investigation".
HMRC has insisted it "systematically worked through" all the data provided and recouped £135 million in tax, interest and penalties from those seeking to get out of paying tax by hiding their assets in Switzerland.
"The decision to prosecute is made by the Crown Prosecution Service based on the facts," it added.
Additional reporting by Press Association