The Guardian / BBC story of alleged tax evasion at HSBC between 2005 and 2007 covers old ground for some of us who have been around the tax haven scene for some time. But, five years after i first covered the story there are still questions to ask.

First, why has HSBC survived all the scandals surrounding it with a banking licence?

Well, because we’ve just spent some trillions propping up the banking system. And we rather think that trashing one of the largest banks in the world after doing that might be a bad idea.

Second, why has no one been prosecuted in HSBC in the UK as yet?

Perhaps because no one has been identified in the UK as having broken UK law. That bankers in Switzerland do things which are legal in Switzerland is not, as yet, a breach of UK law.

Third, why was Stephen Green allowed to be made a peer and a minister and why was he not made to resign as they HSBC scandals (for there have been many) unfolded?

There is no mechanism to force a peer to resign.

Sixth, why has so little money been recovered?

Possibly because not much was actually evaded and thus not much is owed?

20 thoughts on “Sigh”

  1. I was in a presentation on personal income takes in France this morning, and one slide made reference to bank accounts held in “tax heavens”. I rather liked the idea of that.

  2. Provided that you don’t require your articles to bear more than the vaguest passing resemblance to the truth then there is much to be said for Murphy’s campaign.

    In true Goebelsian fashion by repeating the lie and magnifying it he already has the MSM onside, and so all the man on the clarm omnibus hears is a steady drip drip of lies which he begins to believe.

    So far as I can tell there seems to be precious little of a countervailing voice of truth (in the MSM that is) just lots of half informed studio guests being shocked and sickened by the same imaginary calculus.

    Therefore because there is no traction in the MSM for the truth those politicians who might be expected to benefit from telling it (ie the free market part on the right of the tory party) don’t bother.

    Therefore we are fucked. The election will be fought on the ground chosen by the trots and everybody will suffer.

    But nobody more than those for whom the fucking labour party purports to want to support.

    Bastards bastards bastadrs (my typing finger is so outraged it can’t arsed to bother with the right keys let alone the right order)

  3. @TimN: Incomes takes is almost as glorious a typo. Unless it was intentional, in which case consider my cap doffed.

  4. @Bloke In Italy

    I made this point last week. Unfortunately, the idiots who skirt the truth and create the headlines are perpetuating a discussion based on only half the fact. They shout louder and they shout longer. It is all too often the case that the educated few speak up loud enough to make a real difference.

    I received an email on Friday asking me to sign a petition to have entrepreneur’s relief removed! What nonsense was that? Some busy body social campaigner read a little online from Murphy-type monsters and went off to change the world. Its very much the case that a little knowledge is a dangerous thing. I can’t help but think these people have less than a little.

  5. @Dan Arlington,

    No less an organisation than the National Audit Office have said that HMRC should investigate Entrepreneurs’ Relief more closely.

    Evidence: http://www.bbc.co.uk/news/uk-30131276

    Scrapping entrepreneurs’ relief entirely sounds to me like throwing the baby out with the bathwater; but I don’t know exactly what these campaigners are demanding.

  6. When does the campaign to slaughter every golden egg laying goose begin? (In the the interests of fairness and social justice, of course.)

  7. So Much for Subtlety

    Perhaps because no one has been identified in the UK as having broken UK law. That bankers in Switzerland do things which are legal in Switzerland is not, as yet, a breach of UK law.

    Unfortunately the key words there are “as yet”. They will be.

    More and more I think of tax havens as providing a social service. The central theme of the past century of politics has been, I think, that the personal is political. That our private lives are intensely political acts and ought to be shaped and controlled by the government.

    Tax havens offer one of the few avenues of escape. If it gets too bad, we can take our money and run. It is obvious why governments and the Left don’t like that. I doubt that “Dave” will be standing up for us either.

    So good for HSBC.

  8. Bloke in Costa Rica

    I remain hopeful that one day the combination of Murphy’s hubris and ignorance will lead him to say something actionable against some deep-pocketed individual, so that he can be taken to the cleaners.

  9. Well it does look awfully like HSBC has been actively selling accounts held in places that don’t (didn’t used to) talk to the UK mainland tax authorities to UK mainland residents in the UK mainland. Leaving aside the question of its legality, how can one not see that as “aiding and abetting tax evasion”?

    @SMFS, if things get too bad then you should indeed take your money and run. But it looks like you want to stay put but your money to run off elsewhere where it isn’t taxed.

  10. how can one not see that as “aiding and abetting tax evasion”?

    Because it is always a personal responsibility to report your tax affairs to HMRC. Even if you have an appointed agent. Which wouldn’t be your bank in any case.

    “Facilitating”, I would agree with you. But then so does every Spanish, Cypriot or French holiday home selling agent (as far as UK taxes are concerned.)

  11. @Surreptitious,

    I think you have to be an “expat” to realise what the banks get up to, or used to. Time was, the minute a Brit moved abroad, and told his mainland high-street branch of the new address, he would be bombarded with invitations to cocktail evenings at swanky hotels (the sales pitches were done all over Europe) with presentations on how to put your money in the Jersey or Guernsey branch of said mainland bank. With it not quite said openly that you then wouldn’t have to declare income booked through there to the tax office of your new home.

    And believe me, you didn’t have to have a lot of money to get such invites. So it was quite fine for British banks to abet evasion of non-British taxes, in a way that they would have been shut down were they to actively market channel island accounts to UK mainland residents.

    This looks rather similar to me, although the stories of course are all at the grander end of the scale, and about the people who got caught with 5 or 6 figure tax bills outstanding. If we know anything about wealth distribution the real money will be in lots of far smaller people.

  12. Time was, the minute a Brit moved abroad, and told his mainland high-street branch of the new address, he would be bombarded with invitations to cocktail evenings at swanky hotels (the sales pitches were done all over Europe) with presentations on how to put your money in the Jersey or Guernsey branch of said mainland bank.

    Must have been prior to 2003: I didn’t get any of that. 🙁

  13. BiG has put the tin hat on this one:”how can one not see that as aiding and abetting tax evasion”? Tim is running out of credibility with his hair splitting about tax avoidance/evasion etc.The tide of opinion is running against him at the flood.
    His wild resort (above)to the too big to fail argument is clutching at straws (to extend the metaphor).It is precisely because people object to paying to prop up the commercial banks ,although they have a licence to create money (the printing is done for them by the State) but still manage to lose money hand over fist, that the latest revelations make sensible not-rich people very angry and look at radical banking reform.
    Miliband’s lead in the polls is not being diminished by the shit storm of vulgar abuse coming his way from the Media (including the BBC) so defending the indefensible is probably not the best strategy to protect the “deified markets ” (Pope Francis’s words) that Tim worships. Some strategic retreat and compromise would appear to be more in order.

  14. DBC’s comment is a marvelous example that the Left favours technocratic rule over mob rule when the technocrats are them. If the technocrats are insufficiently left-wing, as they appear to be on this topic, suddenly it’s back to favouring mob rule, and the Tories should come the Left’s way to appease the mob (funny how Labour never have to go the Right’s way to appease the baying mob against the advice of *their* technocrats).

  15. The tide of opinion is running against him at the flood.

    Well, yes. Doesn’t make that opinion any less ill-informed.

    although they have a licence to create money (the printing is done for them by the State)

    No. These are two different sorts of money. Even though they are generally fungible. Credit creation by the banks through fractional-reserve does not result in more money being printed by anybody.

  16. Tim N,

    “No, not good.”

    Two years ago Standard Chartered bank in Singapore froze my accounts because they did not know what my favorite colour was. It took two months to get them unfrozen.

    That’s not a joke BTW, they had decided that to comply with various ‘know your customer’ regulations, knowing someones favorite colour was a good place to start. The reason it took two months to unfreeze those account was that they had completely forgotten to tell any of their staff outside some small ‘know your customer’ dept that this was requirement, or that the ‘know your customer’ dept existed, much less had the power to freeze bank accounts while no-one in rest of the bank was able unfreeze them.

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