'Tax havens' agree to clampdown on tax avoidance and evasion


David Cameron: "When some businesses don't pay their taxes, it corrodes public trust"

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The prime minister has hailed an agreement by the UK's Overseas Territories and Crown dependencies to sign up to a tax evasion clampdown.

David Cameron said it was a "very positive step forward" ahead of the G8 meeting, which starts on Monday.

But sources from the Crown Dependencies told the BBC a proposed register of companies, revealing the true owners, may not work.

They say it does not include trusts and the UK business community may object.

Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man were all represented at a meeting at No 10 on Saturday.

Many regard the islands and outposts as tax havens, although that is a label they strongly dispute.

They have agreed to sign up to the Multilateral Convention on Mutual Assistance in Tax Matters - an initiative led by the Organisation for Economic Cooperation and Development (OECD).

Start Quote

We are an open and transparent jurisdiction”

End Quote Ian Gorst Jersey's Chief Minister

They have also agreed to publish national action plans on beneficial ownership, detailing the true owners of so-called "shell" companies.

However, the BBC's business correspondent Joe Lynam said sources were warning ministers had not consulted the UK business community, which may reject the plan because it would prevent them saving as much corporation tax as they do at present.

They also said the register - to be held by Companies House - may never be made accessible to the public as many had hoped.

The government has said initially it would be available only to authorities such as HM Revenue and Customs, but a consultation would be held on making it public.

Mr Cameron said: "Personally, I would hope the whole world will move towards public registers of beneficial ownership, but I want to maximise the leverage that the UK has got over others in terms of each step in turn.

"Also, I want to make sure that business and enterprise comes with us on this debate."

'Absolutely vital'

The PM said it had been a "very good" meeting: "It is important we are getting our house in order. What the Crown dependencies... have signed up to is basically the existing and the new standards for exchanging tax information. That is absolutely vital.


Think of those rows about Google, Starbucks and others and their tax bills. They were case studies in the tussle between multinational companies and national governments over tax.

At the heart of the tussle is a perpetual tension. Governments want to secure what they believe they are owed, but also hope to secure a competitive advantage over others by offering tax incentives to firms in the hope of luring them to their shores.

That is the big picture. The detail breaks down like this: David Cameron wanted to be seen to be getting his own house in order first and so wanted British Crown Dependencies and Overseas Territories to be much more transparent.

He says the agreement reached will secure that, but some of those who met him are privately unconvinced.

Mr Cameron also wants UK registered companies to be forced to be more clear about who their financial beneficiaries are. But he is not certain yet that that register should be public.

Why? Because if other countries didn't follow suit, it could put British businesses at a disadvantage.

We are back to that tussle again.

"It is a very positive step forward and it means that Britain's voice in the G8, and campaigning on this issue around the world for proper taxes, proper companies, proper laws... will be stronger."

In a joint statement, the leaders of the territories and dependencies said: "We are committed to continuing to play a leading role in delivering a responsible and effectively regulated global business environment and in tackling the global problem of tax evasion."

Alongside the new register, the government is also continuing to push for automatic information exchange with Britain's Overseas Territories and Crown dependencies.

Richard Murphy, director of Tax Research UK, told the BBC how it would work.

"If, for example, you had an account in Jersey... Jersey would have to tell the UK you've got it and how much income you earn on it automatically, without your consent."

But he added: "Let's be honest, tax havens deliberately disguise who has accounts in their jurisdictions, whether that is individuals by some form of banking secrecy or companies through the use of trusts and offshore companies."

Jersey, Guernsey and the Isle of Man have already agreed to some information sharing with the UK, but not all other countries.

'Through persuasion'

Speaking after the meeting, Jersey's Chief Minister Ian Gorst said the label "tax haven" was "not a term we accept or acknowledge".

"We are an open and transparent jurisdiction," he told the BBC.

"We're already meeting current international standards. We've got over 40 tax information exchange agreements, we don't have banking secrecy law, and we've said again today to the prime minister that actually we'd like to have the OECD convention extended to us."

David Cameron meeting the leaders of Britain's Overseas Territories and Crown Dependencies Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla and Montserrat were among those represented at the meeting

Labour leader Ed Miliband said Mr Cameron must be prepared, if necessary, to get tough with any territories or dependencies which refuse to comply with the UK's demands.

"Britain, which has responsibility for arguably the biggest network of tax havens in the world, needs to use all its considerable legal power and authority to ensure all the UK overseas territories and Crown dependencies which act as tax havens sign up," he said in an article for The Independent.

Asked about the possibility of imposing such requirements, Treasury Chief Secretary Danny Alexander told the BBC: "I think it's better to do it through persuasion... but look, if in the end it comes to that, I dare say we would consider it."

In a report, the charity Christian Aid said the territories were the largest source of investment to developing countries, but these nations were losing tax worth £100bn a year because of the way money was moved through havens.

Mr Cameron is expected to ask leaders including US President Barack Obama and German Chancellor Angela Merkel to sign up to a new set of core principles on tax at the G8 summit at Loch Erne.


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  • rate this

    Comment number 373.

    I do not believe in taxes, the rich should keep their money, they have worked hard for it. I am sure they will find a way to keep their well earned money from the clutches of the treasury.

  • rate this

    Comment number 332.

    The phrase 'tax haven' is generally used to describe any country that happens to have a lower tax rate than you, just as the phrase 'rich' is normally used to describe anyone who has more money than you. They are both wrong and misleading. The biggest 'tax haven'; in Europe is the UK, since Labour set up the non dom regime.

  • rate this

    Comment number 331.

    Individual taxpayers on PAYE are effectively taxed on their turnover, with no allowances for travel, meals or hospitality etc. Why are companies taxed only on their profit. If I was taxed on my profit only after deductions for travel, subsistence , rent living expenses, there would be very little "profit" left over to tax. One law for the masses and another much beneficial tax law for the rich!

  • rate this

    Comment number 222.

    Why do tax loopholes not get closed the second it is realised that they are open? Now Cameron wants applause for doing something that should have been done anyway. It's pathetic.

  • rate this

    Comment number 207.

    I fail to see why governments can't just say to multinational companies, it doesn't matter where you are based in the world, if you want to operate here, you will pay taxes on the income you generate. No offsetting profits or any of those accounting tricks, you pay your fair share.


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