Lloyds implicated in BBC offshore tax exposé

At the Jersey-based Lloyds TSB Offshore office, an employee is understood to have discussed investing in the bank's High Income fund with the undercover Panorama customer.

The fund, with assets of almost £300m, is one of a number of Lloyds' funds which pay income using an agent in Hong Kong.

The Lloyds employee, in the course of his advice, allegedly told the undercover reporter  income earned on deposits made in the tax 'haven' is paid to clients via Hong Kong to "get around" the European Savings Tax Directive.

"Income made from the fund would go to Hong Kong and then Hong Kong would send it out to all the clients, and that's how we get round it," the undercover reporter is told.

The Panorama reporter is understood to have told the Lloyds employee that he wished to avoid paying tax and asked about Inland Revenue income reporting requirements.

"It's of no interest to us whether you tell the tax man or not," he is allegedly told. "It's not our business."

In a statement responding to the Panorama investigation, Lloyds said: "Any advice we offer customers is made within the context of the robust anti money-laundering systems and processes we have in place.

"These processes are designed to ensure that colleagues are able to identify and report any suspicious activity on the part of our customers."

Northern Rock, which received over £27bn in taxpayers' money in 2008, also came in for criticism over its use of offshore tax havens for tax avoidance purposes.

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• Topics
• Offshore Investment
• Lloyds Banking Group