When you see beautiful images on the telly of sun kissed beaches in the British Virgin Islands, you think of palm trees and pina colada’s, not money laundering and safety deposit boxes.
Adverts for Jersey, Guernsey and the Isle of Man rarely mention the companies that legally pretend to trade there just to avoid paying more tax in the UK. Instead the director prefers to focus on the climate, the scenery and the sumptuous food.
The Jersey Tourist Board do promise to take your breath away, with the help of fantastic scenery and some dodgy music but nowhere in their video do they mention that they can do the same thing to your tax bill. But they can and that’s why so many multi-national companies flock there.
In a nutshell here’s how it works:
Doris in Dogsthorpe doesn’t fancy paying lots of tax on her vast fortune so she employs some fancy-dan accountants and lawyers to find a way to pretend it doesn’t really reside here.
She doesn’t have to physically move her cash from under her mattress or take her diamonds in a sock to the Cayman Islands, no; she just sets up a shell company or a trust and Bob’s your uncle; legally the company in the Cayman Islands owns her expensive trinkets and a brick wall of secrecy then protects her identity and her tax liability.
The best thing for Doris is that amazingly, it is all perfectly legal!
Private Eye magazine revealed last week that over £100m pounds worth of land and businesses in this city are owned by these types of companies and even the private company behind the Peterborough Investment partnership, set up to spearhead the regeneration of “awkward” development sites in Peterborough, including Fletton Quays, is based in a tax haven.
Until this week I thought the Panama papers were something to do with rolling your own cigars not printing your own money, but this leak of documents, from the world’s fourth biggest offshore law firm, Mossack Fonseca, has once again highlighted the pressing need for something to be done about these murky practices, practices that cost this country billions of pounds in lost taxes, at a time when just about every aspect of our infrastructure is crumbling.
But are any of us left untainted by companies that take shelter in tax havens?
They are like the Matrix; they are everywhere!
If you ordered something from Amazon last Christmas, bought a coffee from Starbucks or talked to your Aunty Jean in Australia on Skype, then you have been assimilated.
Maybe you fixed a shelf with a Black and Decker drill, sent a parcel Fed Ex to little Billy in Vancouver or just played Angry Birds on your iPad; then you have been trapped and pacified by the tax haven machine.
Even Prime Minister, David Cameron was caught up in the mess following revelations about his late father’s offshore activities.
He has since been forced to publish his tax affairs to prove her has nothing to hide. But shouldn’t all of the people who stand for public office do the same and assure us that they have no allegiances to the companies and organisations that they say they are trying to crack down on for tax avoidance?
A crackdown which has so far failed to even make a dent in the problem.
After the expenses scandal, we need to be sure our politicians are whiter than white and are working in our interest and not that of big business.
Otherwise the suspicion will remain that those that govern are not “of the people and for the people” but instead motivated by self-interest and greed.