Tax evasion is criminal act: ex-DPP

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Published: Friday 13th February 2015 by The News Editor

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A former director of public prosecutions has said that criminal cases should have been brought over any allegations of tax evasion against clients of a private bank whose account details were leaked by a whistle-blower.

HM Revenue and Customs and the Crown Prosecution Service have faced criticism over the fact that only one conviction has been secured using leaked information relating to almost 7,000 UK individuals and organisations with accounts at HSBC’s Swiss subsidiary.

Ex-DPP Keir Starmer’s comments came as the BBC said it had seen an email which w histle-blower Herve Falciani says he sent to HMRC in 2008 offering information about clients at a private bank based in Switzerland.

Mr Falciani, an IT worker at the bank, later passed secret information about HSBC Suisse accounts to French tax authorities, sparking a massive investigation into allegations of tax avoidance and evasion.

HMRC has said it has no record of receiving an email or phone call from the whistle-blower in 2008.

It received files relating to UK residents from the French authorities in 2010, and has used the information to pursue around 1,100 individuals and organisations, securing £135 million in tax, fines and interest payments and one criminal conviction.

HMRC permanent secretary Lin Homer said three cases were passed to the CPS, which chose to prosecute only one of them.

The row was reignited this week after media organisations including the Guardian and BBC Panorama analysed information from the files and published claims that HSBC Suisse employees may have actively encouraged avoidance activities.

Mr Starmer, who is now a general election candidate for the safe Labour seat of Holborn and St Pancras, said criminal prosecution, rather than civil penalties, should be used in allegations of tax evasion.

He told the BBC Radio 4 Today programme: “Tax evasion involving dishonesty is not sort of fraud, it is fraud, it is criminal and should be treated as all other fraud is treated.

“In my view, criminal prosecution ought to be the default position for tax evasion, not civil penalties.

“It is important to send a signal – this is about culture. You only change culture by using all the weapons you have at your disposal.

“A criminal prosecution is a very powerful weapon. People go to prison for quite significant period of time.”

At a meeting of the House of Commons Public Accounts Committee on Wednesday, Ms Homer was asked directly by chair Margaret Hodge whether HMRC had received data from Mr Falciani in 2008. She responded: “Not to my knowledge.”

The BBC has now reported that French newspaper Le Monde has uncovered an email sent by Mr Falciani to HMRC. The whistle-blower said the find “proves that I am right”.

A spokesman for HMRC said: “HMRC has not found a record of receiving an email or any phone call from Mr Falciani in 2008. As Lin Homer said at the PAC, we are looking into whether HMRC received an email or phone call, and if we did what then happened.”

Published: Friday 13th February 2015 by The News Editor

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