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January 5, 2016updated 04 Apr 2017 1:32pm

FCA ends probe into HSBC tax controversy

The FCA has ended its probe into HSBC’s Swiss private banking operation surrounding the 2015 tax evasion scandal. It has been revealed that the regulator will not pursue any formal action.

By John Schaffer

The FCA has ended its probe into HSBC’s Swiss private banking operation surrounding the 2015 tax evasion scandal. It has been revealed that the regulator will not pursue any formal action.

According to Sky news, the examination of the HSBC unit had ended several months ago and the bank had been informed of the FCA’s decision at the time. The news was not announced publicly and was only disclosed on January 4.

The lender was accused of assisting its wealthy clients to evade tax in February 2015, after a BBC Panorama documentary reported that 7,000 British clients had not declared their accounts to HM Revenue & Customs.

Last year, the Guardian newspaper alleged that HSBC’s Swiss banking division had allowed clients to withdraw cash in currencies that were of little use in Switzerland; had marketed schemes to allow wealthy clients to avoid European taxes and had helped to conceal undeclared accounts from domestic tax authorities.

Labour MP and ex-chairman of the Commons public accounts committee, Margaret Hodge, said that the FCA’s decision was "extremely disappointing".

"It seemed pretty clear that the bank was involved not just in aggressive tax avoidance but also in money laundering. We will never know whether the evidence against HSBC didn’t stand up or the Government took fright," Hodge said.

Both HSBC and the FCA declined to comment.

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