UK PM signals tax haven clampdown
British Prime Minister Theresa May
(CNS Business): Just as the Cayman Islands government was feeling confident that its relationship with the British government was better than ever and the UK was beginning to understand and accept the role of the offshore financial sector, the new prime minister, Theresa May, is believed to have ordered a clampdown on the use of offshore tax havens in an attempt to prevent a repeat of the scandal surrounding the collapse of a leading high street store in Britain.
According to British press reports, officials from the new No 10 policy unit have been told to crackdown on tax avoidance like the scheme exposed in the British Home Stores fiasco.
The former owner of the BHS chain, Sir Philip Green, and his family have been accused of plundering BHS using a complex web of offshore companies, set up in tax havens in his wife’s name, to reduce tax bills and reducing corporate transparency.
May has reportedly said that, as part of her reform of capitalism, she wants Whitehall officials to draw up plans to tackle abuses of the tax system in time for the Conservative Party conference in October. The PM has reportedly told aides she was “determined to curb irresponsible and reckless behaviour by business bosses”.
Category: Finance, Financial Services
They are entitled to change their rules as they see fit. If it bites you on the ass that’s just too bad.
Rather than empty talk she can start by closing down tax havens like the Caymans.
Miss PM when you clamp down on the city of London where most financial and accounting scandals originate from, then you can come get us here Cayman.
Time for economic reform. We need legitimate means for getting more money and businesses into these Islands without entertaining fraud and fraudsters. We have enough Mossack & Fonseca prototypes & rogue Banks and insurance companies around these islands to continue with this sort of dominant business.
This isn’t bad news for Cayman. We don’t want these types of abusive tax evasion schemes here anyway! We must ensure home tax is satisfied. We only want legitimate tax exempt individuals!
legitimate tax exempt individuals… isn’t that an oxymoron?
Dave Harvey apparently you are unfamiliar with the complexity of tax codes of onshore jurisdictions and the fact that under such tax codes some “individuals” (and in that terminology we can include bodies corporate) qualify quite legitimately to pay no tax, or in some cases reduced tax, or in some cases they pay no tax on a certain portion or category of their income.
Therefore in answer to your question Dave Harvey, NO it is not an oxymoron to describe such persons as “legitimate tax exempt individuals”. Such individuals are indeed legitimate because they legally meet the conditions for tax exemption under the law of their (onshore) jurisdiction.
In fact it would therefore be hypocritical for onshore jurisdictions to criticise their nationals for using offshore jurisdictions to conduct transactions when such usages and transactions are entirely legal within the four corners of the onshore jurisdiction’s own tax code.
In fact for any onshore jurisdiction which has a Constitution that guarantees “equal treatment under the law” or something similar, it could be argued that if that onshore jurisdiction harasses its nationals who are conducting their transaction and utilising tax exemptions that are contained within their law, that jurisdiction would be behaving in violation of its own Constitution!
We are not a bloody tax haven, Cameron understood that and other sensible souls do as well. The Cayman Islands need to once and for all enact laws with penalties in the millions for any entity registered in this jurisdiction that becomes involved in any of fence which demonstrates aiding and abetting using of Cayman as a tax haven. Clear and simple, this will send the appropriate message, worldwide. Added to this and it has been said countless of times; there needs to be an extensive Ongoing PR process that speaks to our compliance with and our shown d sire to be in line with equitable standards of process and reporting, and transparent governance in the jurisdiction. Finally, there should be negotiated agreements which cover cayman obtaining a percentage of fines charged to entitities where we have cooperated in assisting bringing tax evaders and other types of fraudsters to justice.
Who don’t like what I have said can just lump it.?
Offshore holding entities of onshore operating commercial entities is such a small part of the Cayman financial economy. This just attracts comparatively small fees for some of the law firms.
Cayman’s financial economy is rooted in the investment funds industry. This is the largest revenue generator, by far, for the law firms. For the accounting firms, this is perhaps 90% of revenues. For the hundreds of directors in business on the island, almost all act for investment funds.
Before Theresa May gets too excited about her directive to the UK civil servants who read the Guardian newspaper on the way to work, can someone find a way of getting her a copy of Tony Travers’ recent conference presentation, which gives a superb rebuttal of a speaker from the BBC slagging off our financial industry? For those who would like to see this, it has been recorded on YouTube at “Media Portrayal of the Offshore World – Anthony Travers speaks”.
Good job Tony, we need more of this.
CNS: You seem to have missed this on this site Travers takes aim at ‘delusional thinking’ on offshore finance