Sunday, 22 February 2015

Another day - another law

The "Liberal" Democrat party in the UK has proposed another new law - that of facilitating tax avoidance.

This is a knee-jerk response - one that they hope will be a vote-winner - to the ongoing story that HSBC bank has helped customers open bank accounts in Switzerland and thus avoid tax.

The most obvious first point is that there are already any number of laws that control tax evasion and a number of accountants have already been imprisoned as a result.  Separately there are quite severe laws governing false accounting.

The problem with the HSBC case is that the government (in the form of HMRC) made a deliberate decision not to prosecute the bank because the four major clearing banks in the UK are the tools that the government uses to control the supply of money and the tracing of all transactions.  As with the (many) previous financial scandals the government is so close to the big four banks that, to prosecute any one of them would be like targeting their own family.

Not one banker has been prosecuted for the enormous frauds and false-accounting practices that caused the financial crash; not one banker has been prosecuted for fiddling the LIBOR inter-bank rate.

The banks already extensively spy on their customers on behalf of the government and will grass them up at any opportunity. Tax evasion is already a crime and banks are quite prepared to report any of their customers they suspect of criminal activity.  Opening a bank account in another country is not a crime and to suggest that the government's permission is required to do so is another infringement of basic liberty.  The crime is not reporting profits on income and as the bank is not your accountant there is no way they should know what your profits may be.

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