The Falciani and Lagarde lists
In 2006, an employee of HSBC Geneva, Hervé Falciani, allegedly stole a list of around 130,000 names from his employer. The data found its way to the French government and a subset of around 2,000 names – known as the Lagarde List – was in about 2010 passed to the UK government.
In response to more recent media criticism of its handling of offshore tax evasion, HMRC issued a press release on 9 February 2015 saying:
“We have systematically worked through all the Lagarde data. As a result tax, interest and penalties have now been paid by those who hid their assets in Switzerland to get out of paying tax... The Lagarde List was used by HMRC for the express purpose for which it was provided – to assess, collect, enforce and prosecute tax offences. We have brought in more than £135 million as a result of this work.”
But how systematic is systematic?
Following the 9 February press release, Burges Salmon made a Freedom of Information (FOI) request to HMRC asking the following:
- How many UK taxpayers were on the list?
- How many enquiries were undertaken in relation to them?
- How many cases are still being investigated?
- How many cases have been concluded?
- Of those concluded, in how many cases was there no additional tax to pay and in how many was there additional tax to pay?
Having received calls from a number of concerned clients, the purpose of our request was simply to try and put some scale on the issue. We hoped to demonstrate that media reports had significantly overblown the issue and that clients who, for perfectly legitimate reasons, had money in Switzerland should not fear an HMRC witch-hunt.
HMRC's lack of response
Disappointingly, HMRC – having exceeded the time limit for a response – found itself unable to answer the questions posed. This was not, however, on the grounds of taxpayer confidentiality. Rather, HMRC says that the answers to the above questions are not readily available and would take more than 3.5 days to compile. HMRC also refused to separate the questions (despite our request to do so) and to answer those they could. This implies that they do not have central data in relation to any of the above questions.
Some FOI requests are made with the purpose of trying to trip-up the government department concerned. In this case, however, the opposite was true. We hoped to show concerned clients that HMRC was in fact doing an effective job and that the press stories in February were old news.
While we continue to believe that clients who have legitimate Swiss accounts have little to fear, it is very disappointing that HMRC's investigation of the Lagarde data does not appear to be sufficiently "systematic" to be able quickly to answer the above questions.