HMRC could find itself hauled through the courts over its “pathetic” handling of the HSBC scandal.
Online campaign group Avaaz has initiated judicial review proceedings against the tax authority after the Revenue offered an amnesty to hundreds of UK customers it identified as squirreling money away in Switzerland. This allowed the individuals to dodge fines of up to 200% of the money they owed.
Evaders were encouraged to use a process called the Liechtenstein Disclosure Facility (LDF), which allowed them to pay the amount of tax avoided, plus a 10% fine. They were also given immunity from prosecution.
The proposed action would mark the first legal challenge against HMRC’s handling of the scandal, which has seen the Revenue prosecute just one tax cheat out of a database of 3,600. The so-called “Falciani list” of UK HSBC clients was handed to the taxman five years ago.
Avaaz’s campaign director, Alex Wilks, said: “If the police extended the terms of knife amnesties to criminals caught carrying weapons, the public would be outraged. Tax officials must urgently explain why they gave get-out-of-jail-free cards to so many wealthy tax dodgers.”
The campaign group alleges that HMRC misused the LDF by allowing known evaders to claim immunity. It claims that amnesties should only be used to encourage tax cheats whose identities are not known to come forward.
Avaaz last week issued a letter to the Revenue, which marks the first step in a judicial review process. HMRC has 30 days to respond, after which the group can submit an application to a judge.
Other nations have taken a tougher stance against both HSBC and its customers. France has charged the Swiss subsidiary with fraud and tax avoidance, while sentencing French national Arlette Ricci to a year in prison.
Spain has recovered around £180 million from evaders named in the “Falciani list” (also known as the Lagarde list), while French authorities have clawed back £200 million. In comparison, HMRC has managed to recoup just £135 million.
A spokesman for HMRC said: “HMRC will strongly contest any action. We investigated and took action on the Lagarde list effectively.”
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