800 HSBC clients told to pay up for Swiss tax dodge

800 HSBC clients told to pay up for Swiss tax dodge
Robert Watts. Sunday Times. London (UK): Sep 4, 2011. pg. 1
NEARLY 800 wealthy British clients at HSBC are being investigated by the taxman for "serious tax fraud" after stashing money in Swiss bank accounts.
Thousands more of HSBC's customers face having their personal tax affairs probed unless they come forward soon, as HM Revenue & Customs combs the records of 7,000 customers that were stolen by a former member of the bank's Swiss staff.
Accountants acting for those already under investigation by HMRC say those embroiled include celebrities and prominent figures in the City.
"We are talking about household names here," said one accountant. HMRC has sent letters announcing the launch of an investigation to almost 800 of the bank's clients in recent months.
"You are suspected of serious tax fraud," the letter reads. "We will undertake an investigation into your personal tax affairs. We will also undertake an investigation of the tax affairs of any company or other entity that may have an impact on your personal tax affairs."
A senior source at HMRC said it expects to raise hundreds of millions of pounds for the exchequer from these investigations.
The names and account details were garnered from the "Falciani List", records pilfered by disgruntled former IT worker Herve Falciani.
None of the individuals affected will be able to make use of the recent deal struck between the British government and the Swiss authorities. Under the pact, people with assets hidden in Swiss bank accounts will be landed with a one-off tax bill to settle their arrears, plus a withholding tax from 2013 onwards. HMRC is conducting the investigation under "Code of Practice 9" -- a probe of an individual's financial affairs over the past 20 years. Those found guilty of tax evasion face paying any due tax, plus interest. They will also incur a penalty of up to 200% of the outstanding tax.
Fiona Fernie, tax investigation partner at BDO, the accountancy firm, said: "I strongly advise any HSBC customers who believe they could be on this list, but have not yet received one of these letters, to approach the Revenue and make a disclosure straight away."
"HSBC does not condone tax evasion and seeks to comply with the letter and spirit of the law in all the countries and territories in which it operates."
Credit: Robert Watts Economics Correspondent [Illustration] Caption: An invitation you can't refuse
Reply to
sufaud
wrote:
"I strongly advise any HSBC customers who believe they could be
"HSBC does not condone tax evasion and seeks to comply
Switzerland signed up for the European Savings Directive, 2005. UK residents' accounts became subject to withholding tax on savings income. The smart money left.
Reply to
The Revd
wrote:
"HSBC does not condone tax evasion and seeks to comply
I would have thought that anyone with any significant amount of money could fairly easily set themselves up with a mailing address outside of Europe and use that as a contact address for the Swiss bank to use.
Nobody from the bank is going to come around to actually check that you live where you say you do.
Chris
Reply to
Chris Blunt
wrote:
"I strongly advise any HSBC customers who believe they could be
"HSBC does not condone tax evasion and seeks to comply
A mailing address is no longer sufficient. The days of the numbered Swiss account are over.
But they will want to verify your residence status to comply with the EU Savings Directive.
Reply to
The Revd

"I strongly advise any HSBC customers who believe they could be
"HSBC does not condone tax evasion and seeks to comply
Not really. They are still useful depositories for dodgy money, all that you lose is the ability to gain tax free interest on that dodgy money
tim
Reply to
tim....
And since the interest payable is 10% of 3/8ths of the cube root of eff all, it's no great loss at all. I used to have the Swiss private banks as clients, and they were the world's worst investors because they really didn't need to be any good. Look at it this way:
You are a South American cattle-baron. You somehow get your wealth out of a flaky country with a Mickey Mouse currency subject to massive inflation and devaluations - this was, after all, the 80s and early 90s - and into Geneva, quite possibly in the form of jewellery and lumps of gold cunningly cast as gigantic belt-buckles. You are more than happy to convert into Swiss Francs, which you know will hold their value. You don't want your bank speculating on your behalf in equities. You want cash, even with the possibility of only fractional interest, or the most solid of government or corporate bonds.
A client of mine once went off for a couple of weeks skiing, and didn't come back for five weeks. Everything was delightfully dull, and nothing could go wrong. His clients were all delighted with him.
Reply to
Charlie
wrote:
"I strongly advise any HSBC customers who believe they could be
"HSBC does not condone tax evasion and seeks to comply
Switzerland now requires full identification from anyone opening an account. You can certainly open an account and hold dodgy money in it, you can even make capital gains free of tax. As you say, all you lose is the ability to gain certain kinds of income tax free.
Reply to
The Revd
wrote:
Of course they will want identity as well, but that is not relevant as far as liability to tax is concerned. They use the address they have on record for you to decide whether you are a UK (or EU) resident, so that decides whether they will deduct withholding tax or not.
This has nothing to do with numbered accounts.
Right, but for those with enough money to hide it's easy enough to come up with suitable evidence to show residency almost anywhere you want.
Chris
Reply to
Chris Blunt
wrote:
The mailing address on record is no indication of residence status.
Perhaps, pre-2005. There is much more due diligence these days.
Reply to
The Revd
wrote:
If they don't use the address you have shown them you live at, then what do you believe they use to determine residence?
Such as? All they ask for is something like an electricity or telephone bill. Either of those can be fairly easily arranged with a little bit of effort.
Reply to
Chris Blunt
wrote:
The primary identification (passport) is typically used for establishing residence. The country of citizenship is usually assumed to be the country of residence in the absence of evidence to the contrary (resident visa in the country of claimed residence or other resident documentation).
A utility bill doesn't usually cut it. I've been through this myself.
Reply to
The Revd
A UK passport in particular (and I think this may be true of other countries) doesn't prove residence at all. We recently bought a boat in Belgium and although the Belgian system was quite happy to allow any EU resident to register a boat a UK passport was no use. We had to get a letter signed by a JP to say that we really did live where we said we did. A Belgian bank wanted much what a UK bank requires to prove residency - utility bills etc., again a passport was of no use at all.
Reply to
tinnews
wrote:
Nonsense. I have a UK passport but I've lived overseas for many years now. I've held accounts with several offshore banks during that time, and none of them have assumed I'm a UK resident as a result of holding a UK passport. In every case they have based it on my claimed country of residence, and I've never needed to produce anything more than a couple of utility bills for them to verify that.
Then I suggest you take a look at the list of requirements here from HSBC's offshore banking unit.
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Either an electricity or telephone bill are perfectly acceptable as proof of address. Either of those can be set up with little difficulty by anyone who is sufficiently interested in doing so.
Reply to
Chris Blunt
wrote:
Same here.
All the banks I've dealt with have required proof of residence: real proof, not just some trivial utility bill.
I thought we were talking about Swiss banks as opposed to some Isle of Man bucket shop that apparently doesn't even require documentation for a change of address!
Reply to
The Revd
wrote:
What constitutes "real proof"?
Whatever is required is not difficult to produce for someone who has enough money to hide to make it worthwhile doing. I live in the Philippines and you can get a permanent residence visa here simply by putting US$10,000 in a deposit account in a local bank.
Even if you had to take out a rental agreement on a dirt cheap apartment in a small city in a South American, African or Asian country and put a few bills in your name it would only cost you a few hundred US$ a year, which is worth doing if you were hiding millions.
Nobody from the bank is going a come around to check up that you really are sleeping in the place you tell them you live at.
No, we were talking about HSBC. Read the subject line again.
Reply to
Chris Blunt
wrote:
It's even easier elsewhere. A permanent residence visa works just fine.
I suppose it depends on the quality of bank you deal with. Some are apparently more conscientious than others.
Nor will they necessarily accept your 'proof of residence'.
Not a HSBC Isle of Man bucket shop subsidiary, in other words.
Reply to
The Revd
wrote:
In fact holding a residence visa for a country doesn't prove you actually live there, it just proves you have the right to live there. I have a document which shows I have the right to permanent residence in Hong Kong, but I haven't lived there for 15 years now.
Despite your claims to the contrary, I've yet to find any bank that doesn't accept utility bills in your name as sufficient evidence.
In other words what? HSBC on the Isle of Man has the same relationship to the HSBC Group as their branches in Switzerland do. They're both ultimately 100% owned subsidiaries of HSBC Holdings plc.
So are you going to come up with some documented examples of banks that will not accept utility bills as proof of address like I did with HSBC? I could produce numerous other examples of banks that are satisfied by that requirement.
Reply to
Chris Blunt
wrote:
There is very little that can prove conclusively that you actually live in the country you claim to live in. At least a permanent resident visa demonstrates that you are legally entitled to live there, which a utility bill doesn't.
Depite your claims, I've yet to find a Swiss bank that does.
But they are subject to different laws and codes of practice.
Where's the documented example of a *Swiss* bank that is satisfied with that requirement?
Reply to
The Revd
wrote:
I agree it is difficult to prove, which is exactly why I said it's so easy to produce evidence to satisfy the requirements. Entitlement to live in a place is quite different from actually living there, which is why few banks accept visas as proof of residence.
There are the requirements for Credit Suisse, which clearly states that either an electricity bill or telephone bill is acceptable as proof of address.
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As above.
Reply to
Chris Blunt
wrote:
On the other hand, a utility bill from a country in which you have no right to reside is clearly bogus.
Subsidiary bank in India.
In India.
Reply to
The Revd

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