Oxfam is calling on the Prime Minister to intervene to clean up Britain’s dirty offshore backyard after the Panama Papers revealed that UK-linked tax havens, in particular the British Virgin Islands, were used to register more than half of the companies involved in the leak.
At the G8 in 2013, David Cameron pledged to make tax dodgers ‘wake up and smell the coffee’ and Oxfam welcomes the fact that the UK is about to introduce a public register of company owners – which will help crack down on the use of shell companies to avoid tax.
But three years after the Overseas Territories and Crown Dependencies committed to look at introducing public registries of the beneficial owners of shell companies in their jurisdictions, so far only one Overseas Territory, Montserrat, has taken action.
Now Oxfam has set out five steps the Prime Minister needs to take to put the UK’s house in order before he hosts an international tax and anti-corruption summit in London on 12 May.
- Make a crackdown on tax-dodging central to the summit’s agenda, with a clear and binding action plan and second generation of reforms to global tax rules so that all countries, including the poorest, benefit from changes.
- Require senior representatives from the Overseas Territories and Crown Dependencies to attend the summit and to introduce public registries of the beneficial owners of shell companies in their jurisdictions – a move that will make it harder for both rich individuals and wealthy corporations to avoid tax.
- Immediately announce that the UK will spearhead international efforts to make companies publish the amounts of money they hold in tax havens, especially in havens linked to the UK.
- Ensure that poor countries are supported to attend the summit so they can testify to the impact of tax avoidance on their fight against poverty and play a central role in developing plans to end tax havens.
- Mandate an independent public review of the functioning and operations of the City of London Corporation, which can be seen as having many qualities of a tax haven.
The Panama data shows that the UK is home to nearly 2,000 intermediaries involved in the scandal, middlemen such as banks, law firms and company incorporators – second only to Hong Kong and well ahead of Switzerland and Luxembourg.
Nick Bryer, Oxfam’s Head of Inequality Campaign, said: “If David Cameron wants next month’s tax and anti-corruption summit to be a success, he needs to roll up his sleeves and bring Britain’s rogue Overseas Territories and Crown Dependencies into line.
“It’s been nearly three years since UK-linked tax havens promised the Prime Minister they would look at introducing registers of company owners to help end tax avoidance – it’s high time he made sure they finish the job.
“As David Cameron has recognised, it’s the world’s poorest people who continue to pay the highest price for tax dodging, missing out on decent education and healthcare that the lost billions could fund.
“The role of British-linked tax havens in helping the rich and powerful get away without paying their fair share is a stain on the UK’s record and damages our credibility as a leader in the fight against corruption.”