HMRC will mainly be asked questions about HSBC, the ‘Lagarde list’ and its methods of dealing with tax evasion. The revenue authority has been criticised several times by PAC chair Margaret Hodge in the past few years.
“You are left wondering, as you see the enormity of what has been going on, what it actually takes to bring a tax cheat to court,” said Hodge today.
The summons comes as thousands of documents belonging to HSBC detailing how the bank’s Swiss operation helped customers avoid millions of pounds in tax were released by the ICIJ, the organisation behind November’s LuxLeaks exposé.
The documents were first seen by French police in 2007, and in 2010 were compiled into the confidential ‘Lagarde list’ – named after then-French finance minister Christine Lagarde – which was given to tax authorities around the world, including HMRC.
“We’ve known [about] this list of 7,000 UK residents who’ve had accounts in Switzerland since 2010,” Hodge told the BBC. “We know that these tax authorities have only pursued around 1,100; they’ve only got in £135 million, much less than other tax authorities across Europe, and they’ve only taken one person to court.”
The Lagarde list led to arrests in Argentina, Belgium, Greece, Spain and the US, causing several politicians to criticise HMRC and the government for not punishing offenders more severely in the UK.
Of the 6,800 UK-resident entities on the list, there was strong enough data to pursue around 3,400 individuals, companies, trusts and partnerships.
“HMRC has focused on taking civil action,” said financial secretary to the treasury David Gauke, defending the revenue authority. “Civil penalties can be very considerable: £135 million of tax, interest and penalties have been recovered.”
“There are large numbers of people who’ve had to pay the tax, pay interest on the tax and pay a penalty as a consequence of action HMRC has taken with that list.”
Due to the upcoming general election, Wednesday’s committee hearing will not be open to the public.
