Bailed out bank bends tax rules for wealthy customers
Lloyds bank is under scrutiny after an undercover team of TV reporters secretly filmed a bank adviser explaining how wealthy British customers could avoid paying tax on cash invested offshore.
BBC’s Panorama programme, to be screened tonight, claims the Jersey unit of the bank is channelling client money through China in a tax avoidance scheme
The allegations are with HM Revenue and Customs for consideration of action.
The programme filmed a journalist posing as a client wanting to invest £4 million in an interview with a Lloyds TSB Offshore employee based in Jersey.
The employee explained that if the cash deposits were made in China via Hong Kong, the transaction would fall outside of the European Savings Tax Directive.
The journalist clearly said he did not want to pay tax and the banker said: “It’s of no interest to us whether you tell the taxman or not. It is not our business.”
According to the BBC, other banks bailed out by the taxpayer, including Northern Rock, are also directing wealthy customers tax havens.
HMRC is offering an amnesty to UK taxpayers with offshore savings accounts allowing savers to pay outstanding tax on interest, plus a penalty of 10%, if they come forward by March 2010.
The first amnesty n 2007 raised £450 million by targeting offshore accounts provided by High Street banks.
Tax evaders have been warned that HMRC will have information of their savings from banks and will pursue them for full payment of their tax bills.
Under British law, tax avoidance is legal - avoidance is reducing your tax bill be arranging your financial affairs to take advantage of any allowable tax reductions.
Tax evasion is a crime. Evasion is deliberately arranging your finances by failing to declare your full income that reduces the tax you owe.
Lloyds TSB is 43% owned by the taxpayer after a £17 billion bail out to stop the bank going broke in the recession.
Dave Hartnett, permanent secretary at HMRC, said: “That’s an incredibly irresponsible thing for him to have said. We might interpret that as meaning he was so reckless that he was giving his client a signal that he didn’t have to make a return of income. Were we to find that happening, we would take a dim view.”
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