Tuesday, 18 June 2013

Avoiding action on tax avoidance, evasion and beneficial ownership

David Cameron has been accused by anti-poverty campaigners of "undermining plans to tackle tax evasion," despite his warm words at the G8 at Lough Erne.

There is certainly evidence of a lack of determination to deliver, despite the Prime Minister's protestations he has secured a deal with British Overseas Crown Territories to produce statistics and data on beneficial ownership of companies registered in tax havens.

Earlier this year, in response to veteran Labour backbencher Paul Flynn's question asking the Business department "with reference to the recent sale of the Headquarters of Platinum Prime Property Investments Ltd in the British Virgin Islands, whether he has any plans to require the disclosure of the beneficial ownership of UK property, " was told by junior business minister, Lib Dem Jo Swinson, "The Government has acknowledged concerns about the potential abuse of arrangements for hidden ownership and we have made clear that we will seek to tackle abuse of corporate entities. However, the Government currently has no plans to require disclosure of the beneficial ownership of UK property.(Hansard, 25 February: Column 301W)

How come "beneficial ownership" needs to be disclosed in Crown Territories and not in UK?

In a more recent reply, Treasury minister David Gauke, responding to Paul Flynn's question asking " what recent assessment he has made of the role of brass plate companies in circumventing anti-money laundering regulations; and what recent reports he has received from HM Revenue and Customs on its attempts to control money laundering," that "HM Revenue and Customs has not made any specific assessment of the money laundering risks posed by brass plate companies as this is being considered in the context of wider work on offshore tax evasion. (Hansard, 4 June : Column 1089W)
This week, another Treasury minister, Sajid Javid, told another backbencher Labour MP for Newcastle, Catherine McKinnell, who had asked "how many charities registered with the Charity Commission have been identified by HM Revenue and Customs as being used for tax avoidance purposes in each of the last five years" that " HM Revenue and Customs (HMRC) does not keep central records of the charities it has identified as being used for tax avoidance purposes.

This is because tax avoidance takes a number of forms and HMRC's compliance work therefore spans across multiple sections of the Department. Further, the use of a charity for tax avoidance purposes does not necessarily indicate that the charity is complicit or even aware of its involvement in tax avoidance."(Hansard, 17 June : Column 456W)

Collectively, you don't get the impression the Coalition is serious in challenging tax evasion.


Private enterprise drives growth, reduces poverty, and creates jobs and prosperity for people around the world. Governments have a special responsibility to make proper rules and promote good governance. Fair taxes, increased transparency and open trade are vital drivers of this. We will make areal difference by doing the following:


Tax authorities across the world should automatically share information to fight the scourge of tax evasion.2.

Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.3.

Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.4.

Developing countries should have the information and capacity to collect the taxes owed them

– and other countries have a duty to help them.5.

Extractive companies should report payments to all governments -

And governments should publish income from such companies.6.

Minerals should be sourced legitimately, not plundered from conflictzones.7.

Land transactions should be transparent, respecting the property rights of local communities.8.

Governments should roll back protectionism and agree new trade deals that boost jobs and growth worldwide.9.

Governments should cut wasteful bureaucracy at borders and make it easier and quicker to move goods between developing countries.10.

Governments should publish information on laws, budgets, spending,national statistics, elections and government contracts in a way that iseasy to read and re-use, so that citizens can hold them to account.

18 June 2013


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