Senior London Banker Arrested in Tax Fraud Probe

Matt Clinch | CNBC

A senior London bank executive was arrested on Wednesday on suspicion of tax fraud, according to the tax authority.

HM Revenue & Customs (HMRC) said the suspected fraud concerned a personal tax return and was not related to the person's employer.

(Read More: French Minister Faces Formal Tax Fraud Probe)

HMRC investigators carried out the arrest of the 63-year-old man at a residential address in London.

Alan Lee, deputy director of criminal investigation for HMRC, said: "Tax fraud is a serious crime and HMRC will not hesitate to take action and investigate where we find evidence of someone not playing by the rules."

More From The Financial Times:

Germany Probes Barclays' Tax Loophole Usage
Farage Apologises for Offshore 'Mistake'
'Monstrous Uncertainty' Over Swiss Banks

He added: "Further information cannot be provided at this stage as our investigation is ongoing."

Both the Crown Prosecution Service and HMRC – which investigates cases before referring criminal files to the CPS – have pledged to increase the number of prosecutions over tax fraud, as they try to rein in the £14 billion a year that the economy loses from tax evasion. HMRC's prosecution office was merged into the CPS in 2010.

(Read More: Berlusconi Tax Fraud Sentence Upheld by Italian Court)

In January, the CPS said it would dramatically ramp up the number of tax-evasion cases it took on with a view to prosecution over the next two years. It said it would increase fivefold the number of tax files it handles, to 1,500 a year by 2014-15. This compares with 200 tax convictions the CPS secured in 2010. Its current conviction rate for tax cases stands at 86 per cent.

HMRC has traditionally been wary of the high costs of bringing cases, as well as the difficulty of convincing juries in complex cases. But it has faced pressure to take more tax cases to court, amid fears that a steady decline in prosecutions is eroding the deterrence of fraud and evasion.