Friday, 21 September 2012
Most of us pay tax, one way or another and indirectly via democratic elections we have some form of impact on the way tax within these islands is set, collected and spent. Some people, who hold directorships of companies based or operating in tax havens, also as Peers and MPs, hold office within the UK Parliamentary system and can have impact and influence on the UK Tax system. This surely is a blatant conflict of interest and should not be acceptable anytime, let alone during a recession.
A full list of 68 UK Peers and MPs with directorships or controlling interests in companies linked to tax havens has been published by the Guardian (21.09.2012). It appears that some of the UK’s Parliamentarians who are able to influence tax laws have positions as directors and non executive directors in major companies with offshore links. There are 27 Tories - six of whom are MPs – 17 Labour peers, three Lib Dem peers and another 21 are either crossbench or non-affiliated peers.
The Guardian examined the Parliamentary registers of members' and Lords' interests to identify companies where Parliamentarians are registered as directors or a non-executive directors. They then cross-referenced this with accounts or other financial records to find out if the companies were registered, or had a parent company or subsidiary, in a jurisdiction known as a tax haven.
Tax havens tend to be masked by secrecy and low taxes, and there have been few attempts to identify them. UK Revenue and Customs does not provide a list of tax havens. While there is nothing wrong with a company being based in a tax haven does not necessarily mean that a company is avoiding tax or taking advantage of the secrecy that tends to surround tax havens, even if the tax jurisdictions are closely associated with tax evasion.
Across the pond, in America, there has been a great deal of ongoing irritation with tax evasion, back in March 2009, the 111th US Congress (2009 – 2010) brought in House Resolution 1265 (111th): Stop Tax Haven Abuse Act, which aimed to restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid Federal taxation, and for other purposes., it originally died (was referred to committee). Yet this issue won’t go away, the bill was reintroduced as HR 2669 on July 27th 2011 and again referred to committee and the report stage is awaited.
One of the things the bill did was list the 34 states and dependent territories seriously involved in tax evasion.
2) Antigua and Barbuda.
8) British Virgin Islands.
9) Cayman Islands.
10) Cook Islands.
11) Costa Rica.
17) Hong Kong.
18) Isle of Man.
25) Netherlands Antilles.
28) St. Kitts and Nevis.
29) St. Lucia.
30) St. Vincent and the Grenadines.
33) Turks and Caicos.
Now oddly enough more than a few of them are UK Crown Dependent territories. A couple of months ago the Treasury Minister David Gauke said that it was "morally wrong" to pay tradesmen such as plumbers, builders and cleaners in cash in the hope of avoiding tax. He said that the practice came at "a big cost" to the Treasury and meant other people had to pay more to help balance the books. The Westminster government may have highlighted this in its desire to clamp down on tax avoidance, the problem is that it will hit those who can least affords to tax evade.
US President Obama was 100% right to suggest that the governments of the world should jointly tackle the issue of tax evasion and tax havens. By tackling the tax havens, the tax avoidance and the questionable dealings of the derivative traders, hedge funds and the off balance sheet trading then we might go so way towards dealing with the consequences of the worldwide financial crash. However, I suspect that nice Mr Cameron and the other 18 millionaires in the cabinet will do nothing to close the tax loopholes – so much for all of us being in it together? Hmmm...over to you George...perhaps not!