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HSBC has hit the headlines over a tax evasion scandalReuters

HM Revenue and Customs has had a grilling because of its lack of vigour in pursuing wealthy tax evaders who held accounts at HSBC's private banking division in Switzerland.

HMRC said it received the HSBC data under an international treaty agreement with France which had tight restrictions.

Regarding the "conditions" attached to the HSBC information, an HMRC spokesman told IBTimes UK: "If someone offers you a gift of £155m you are not going to turn it away. You are going to grab it with both hands.

"We receive high grade, low grade and middling information on a daily basis. This was routine."

HMRC's chief executive Lin Homer and Indra Morris, the Treasury's director general for tax and welfare, have also been quizzed as to why other countries such as France and Spain - which couldn't manage a bank - have recovered more money than the UK's haul of £135m, despite British based accounts making up a fifth of the HSBC Switzerland.

The HMRC spokesman added: "We are engaging with the Swiss to find out why what we have received to date is less than had been expected by either party. As the National Audit Office said – based on 13/14 we are in line with our updated forecast.

HMRC pointed out that the Exchequer has got £1.2bn it would not have received without its various tax treaties and agreements.

HMRC
Reuters

In a statement HMRC said it received the HSBC data under very strict conditions, which limited the use of it to pursue offshore tax evasion. The conditions also prevented it from sharing the data with other law enforcement authorities and prevented it from seeking prosecution for other potential offences, such as money laundering.

Lee Sheppard, from Tax Analysts, told IBTimes UK: "The government says the French have put conditions on use of this information. I've never heard of such conditions.

Sheppard explained that pursuing cases can be costly and time consuming. The accounts are numbered, or can be in the name of a banker or trustee and only known to the bank.

If it's a criminal matter, it requires a Swiss banker on the stand under oath and attest to the validity of the records. Switzerland doesn't let its bankers testify - it's illegal.

If a person has say £2m in their account – and is not someone like the UBS tax avoiding billionaire Igor Olenicoff – then the case will cost more than the amount recoverable.

Sheppard added: "So there are lots of barriers – not excusing the authorities. I would say recovering £1.2bn from a target of £3.1bn is good. You don't tend to get a lot of recovery from these things.

"In amnesty you always get less than you think you will. You also find that sometimes these guys will appeal. They go to the European Court of Human Rights and complain – they have that much chutzpa.

The UK's tax authorities set up an open and generous tax agreement with Liechtenstein in September 2009, the Liechtenstein Disclosure Agreement.

The scheme offers more favourable terms than other tax investigations, with participants normally receiving a fine of 10% of tax due instead of 100%, with tax interest and penalties only sought for the previous 10 years rather than the previous 20 years.

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A giant fork designed by Swiss artist Jean-Pierre Zaugg is seen in Lake GenevaAFP

HMRC appears to be proud of its recovery record with the LDF.

Sheppard said: "The LDF this is wide open agreement. You can take your sleazy money away, stick it in bank in Lichtenstein and then join the agreement.

"Say you missed the deadline for the LDF or something, your banker might offer you to move it to another Swiss bank. Or you could switch it to their bank in Singapore where they also have a presence. It's one of the safer off-shore centres."