Jersey

Finance centres 'tax escape routes' for rich

Jersey banknotes
Image caption A report by ActionAid showed a list of the UKs top 100 companies with subsidiaries in finance centres

An author who writes about tax havens has said they act as a "tax escape route" for the rich.

A report by anti-poverty charity ActionAid revealed a quarter of the UKs top 100 companies have offshore subsidiaries.

Nicholas Shaxton said places like Jersey were used by the wealthy to avoid paying large amounts of tax.

Jersey's finance industry hit back at the report, saying it missed the point of what it does.

Mr Shaxton, who wrote Treasure Islands: Tax Havens and the Men who Stole the World, said the island was no different to other places where people put their money and the end result was that poor people were worse off.

He said: "Whatever... the democratic rules of society, the wealthy elite are able to escape from that and the result has been a huge shift of wealth upwards from the poor to the rich.

'Provides liquidity'

"That is what I'm talking about when I say stole the world, a relatively small group of people who have appropriated large amounts of wealth using these escape routes."

ActionAid has accused finance centres such as Jersey of costing the UK economy billions in lost tax and of damaging poor countries in the developing world.

It has put together information about how many of the UK's top 100 companies have subsidiaries in finance centres.

Of the FTSE 100's 34,216 subsidiaries, about a quarter - 8,492 - are in tax havens.

Only two companies - financial advisers Hargreave Lansdowne and Mexican mining company Fresnillo plc - have no subsidiaries in tax havens.

Heather Bestwick, technical director of Jersey Finance, said the ActionAid report did not consider the benefits the finance industry provided.

She said: "There is not equal consideration given to the benefits that countries like Jersey give to the UK, for instance in playing a role in supporting the British economy.

"The international deposits taken in by Jersey banks are upstream to the UK parents and that provides many billions of pounds of liquidity to the market. It is a shame that isn't also taken into consideration when looking at the whole picture."

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