Lloyds investigated over offshore savings

by Gill Montia

Story link: Lloyds investigated over offshore savings

Lloyds Banking Group is being investigated by HM Revenue & Customs (HMRC), over allegations that the bank is encouraging British offshore savers to avoid tax.

According to the BBC’s Panorama programme, to be screened tonight, the Jersey unit of the bank is chanelling money through China.

The Panorama team has secretly filmed a journalist posing as a client with £4 million to invest being interviewed by a Jersey-based Lloyds TSB Offshore employee.

The undercover customer is told that income earned on deposits made in China is paid to clients via Hong Kong, thus avoiding the European Savings Tax Directive.

Lloyds is currently 43% state-owned with the stake likely to rise if and when the bank participates in the Treasury’s Asset Protection Scheme.

According to the BBC, other banks that have been bailed out by the tax payer, including Northern Rock, are also continuing to direct wealthy customers tax havens.

Britons with offshore savings accounts currently have an opportunity to come clean with HMRC under an amnesty that allows savers to settle up any outstanding tax on interest, plus a penalty of 10%, if they come forward by March 2010.

The first such amnesty, known as a Disclosure Opportunity, was undertaken in 2007, when £450 million was raised by targeting offshore accounts provided by High Street banks.

Tax evaders have been warned that they will be pursued by HMRC and that the threat should be taken seriously as the Revenue will be issuing notices to financial institutions requiring information about offshore accounts.