The tax authorities are investigating Lloyds Banking Group after evidence emerged that the bank, kept alive by £17bn of taxpayers’ money, encourages wealthy customers to avoid tax by channelling money through China.
The tax authorities are investigating Lloyds Banking Group after evidence emerged that the bank, kept alive by £17bn of taxpayers’ money, encourages wealthy customers to avoid tax by channelling money through China.
In an undercover film obtained by Panorama, a banker at the Jersey branch of Lloyds TSB Offshore is shown telling a “customer” working for BBC Panorama how income is paid to clients via Hong Kong to “get around” the European Savings Tax Directive. He also admitted that he and his colleagues spent time “brainstorming” tax avoidance schemes.
The “customer” made it clear that he did not want to pay tax but when he asked about reporting to Revenue & Customs (HMRC), the banker said: “It’s of no interest to us whether you tell the taxman or not. It is not our business.”
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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 very dim view of it.”
The affair is not just embarrassing for Lloyds and its chief executive, Eric Daniels, who is under pressure after the bank’s disastrous takeover of HBOS. At the last G20 meeting, Gordon Brown announced: “There will be an end to tax havens.” But not, it seems, for banks funded by UK taxpayers offering tax avoidance schemes.
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