This statement was published in March 2012 by HMRC is support of the appalling UK - Switzerland tax treaty negotiated by the current government under the care and guidance of Dave Hartnett when he was still at HMRC:
In view of the signing of the Agreement between the United Kingdom of Great Britain and Northern Ireland and the Swiss Confederation on cooperation in the area of taxation, the competent authority of the United Kingdom (the Commissioners for Her Majesty's Revenue and Customs — hereinafter referred to as “HMRC”) wishes to set out its position in relation to the criminal investigation of relevant persons for past liabilities incurred before the date of this Agreement in respect of relevant assets.
Provided that a relevant person agrees either to make a one-off payment in accordance with Article 9 of this Agreement or to make a voluntary disclosure in relation to his/her relevant assets in accordance with Article 10 of this Agreement and fully cooperates with HMRC, that person is highly unlikely to be subject to a criminal investigation by HMRC for a tax-related offence for past liabilities in respect of relevant assets from the date he or she irrevocably opted for one of the options, unless either his/her relevant assets represent the proceeds of crime (other than crime connected to a tax-related offence) or represent the proceeds of crime connected to criminal tax-related offences punishable by two years or more imprisonment.
Professional advisers, Swiss paying agents and their employees will need to comply with their legal obligations in respect of money laundering. Whilst it is never possible to provide an absolute assurance against a criminal investigation, it is highly unlikely to be in the public interest of the United Kingdom that professional advisers, Swiss paying agents and their employees will be subject to a criminal investigation by HMRC.
Any assurances relate only to investigations undertaken by HMRC. HMRC does not have sole responsibility for the criminal investigation of tax-related offences and no assurances are given in respect of any activity by other United Kingdom law enforcement agencies.
Any assurances given in this letter regarding criminal investigation apply only in relation to a criminal investigation against a relevant person in respect of relevant assets in Switzerland. No such assurances can be given regarding a criminal investigation against any person in respect of assets situated outside Switzerland.
In this letter, where the context permits, words and expressions have the same meaning given to them in this Agreement.
I added the emphases, and for good reason. What they show is that although HMRC knew there had been widespread criminality in HSBC by the time of the agreement, and they also knew that it was exceptionally unlikely that such abuse was restricted to that bank, they decided that it was not in the public interest to prosecute.
So, at the same time as it was being decided it was worthwhile pursuing very large numbers of people for benefits related issues, including non-payment, through the UK court system it was decided that it was not a good use of that system to pursue wealthy people and their professional advisers for proven, deliberate, large scale criminal acts of theft.
What this says is bankers, tax accountants and their wealthy clients are above the law and other people are not. Of all the things that HSBC and its fraudulent conduct has revealed this is perhaps the most shocking.
To the wealthiest criminals and their assistants within the financial system go the rewards and the plaudits. To everyone else goes intimidation and persecution. This is 21st century Britain.
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Regulatory capture.
It’s not in someone’s interest, and who are this ‘public’ anway?
This is not exactly new is it?
HMRC have always been reluctant to launch criminal prosecutions, the so-called ‘Hansard extract’ dates back to 1990.
HMRC’s approach has always been “‘fess up and we won’t prosecute”.
HMRC have to weigh up the difference between the return and costs of a civil settlement and a criminal prosecution. As we have seen (Harry Rednapp for example) prosecutions don’t always lead to convictions. A criminal law expert I heard commenting on the matter said that the reality was that the evidence from the Swiss banks wasn’t on its own sufficient to guarantee a conviction.
The individuals involved are not ‘above the law’, they are being treated by HMRC in exactly the same way every other taxpayer has been treated over the years – and will be paying the tax etc due.
A series of lengthy expensive show trials might appeal to your rabble-rousing instincts but I’d rather have the tax, interest and penalties collected at low cost to HMG.
Respectfully, HMRC are very good at prosecuting fish and chip shop owners to make a point
But oddly, not the wealthy or bankers
You are simply not telling the truth
“Respectfully, HMRC are very good at prosecuting fish and chip shop owners to make a point ”
Is this really the case? In my admittedly limited experience as long as the miscreants “come clean” HMRC rarely prosecute. I know of a number of people who have been investigated (market traders, clubs etc) and while they’ve faced fines none have gone to court.
If you read HMRC press releases this type of business is the most commonly prosecuted
But even then it is rare
The wealthy can hide behind lawyers who are bigger and better than the ones public sector can afford.
That’s 100% true. So perhaps it is time for HMG to put one of its cost centres to good use, step forward GCHQ motto: “always listening to our customers”. Richard has estimated that UK tax dodgers get away with £30bn+ per year – more than enough to justify the close attention of GCHQ – which in turn would more than re-balance the odds. Indeed, at £30bn a year one could claim that national security was at risk.
Much more than £30bn
Bankers run the place and they’ve stopped bothering to hide it.
Let’s remind ourselves of two words that became so important during the period of Harnett’s reign: relationship management. I’d assume that under his watch, and particularly after the current government came into power, that was specifically defined in the case of HMRC as not taking any actions that might:
a. upset big business or the wealthy and thus embarrass members of the Board of HMRC, or create difficulties for their interests elesewhere;
b. upset any existing or potential donors to and/or members of the Tory party;
c. be detrimental to the future employment prospects of HMRC staff who regard employment as a public servant merely as a very useful stepping stone to a far more lucrative employment in the private sector.
I may be wrong of course, but for a decade now that’s certainly the impression one is given.
Spot on
It’s not just the account holders who need to be prosecuted, what about the bankers who knowingly facilitated the criminal tax-dodging?
Can the UK prosecute a Swiss person for what they did in Switzerland? If so, can the UK extradite the Swiss person to face trial in the UK?
I suppose one potential difference between the person hiding cash in Switzerland and the person fiddling their benefits, is that the first is likely to have the funds available to pay the back tax (plus interest and penalties), where as the second isn’t.
Isn’t the second paragraph just saying that if the defaulting taxpayer makes a full disclosures, and pays all of the outstanding tax etc, then they won’t be prosecuted? Similiar to Code of Practice 9. https://www.gov.uk/government/publications/code-of-practice-9-where-hm-revenue-and-customs-suspect-fraud-cop-9-2012
A situation that comes up from time to time is that someone illegally hides their cash in Switzerland and then either repents, or dies. How is the penitent defaulter, or the innocent heir, meant to regularise their affairs? Must there be a prosecution?
HSBC was an is a British bank
The chair of the HSBC Swiss private bank at the time was British
He still is
He is also still in holy orders
You want Lord Green to be prosecuted? What did Lord Green do that makes him liable to prosecution in England, in your view? What criminal offence do you think he might have committed?
I’m not sure what being in holy orders has to do with whether conduct is criminal or not. No doubt he wrestles with his own conscience, like we all do, for good or for ill.
I am not sure whether there is a case for prosecution or not. There may be a case for barring from office as a director. HSBC has paid more than $2 billion in fines. That may suggests a case. I would certainly think a bar from financial services would be wholly appropriate -0 he should not expose shareholders to risk again
As a clergyman Green is trying to shape the CoE in his mould. I can assure you many deeply resent that. He would not be in a position to do this but for HSBC. There is a very clear link