Four of the top 10 places branded tax havens by campaign group Tax Justice Network have strong UK links
Big companies are avoiding an estimated £100billion a year in tax thanks to Britain’s “spider’s web” of offshore tax havens.
A damning report says the UK and its network of overseas territories is “by far the world’s greatest enabler of corporate tax avoidance”.
Four of the top 10 places branded tax havens by campaign group Tax Justice Network have strong UK links.
In first place is the British Virgin Islands, followed by Bermuda, then the Cayman Islands – all are British Overseas Territories. Seventh is Jersey, a British Crown Dependency.
Every penny avoided is cash not going to the NHS, says John McDonnell
The Tax Justice Network findings highlight the need for wealthy corporations to chip in to pay for our crumbling public services.
Every penny in tax avoided is money that is not being spent on our NHS, our schools and in caring for our elderly.
The recent UN report on poverty exposed that many of our children are going hungry and many elderly are living in destitution, while we know that at the same time many of the super-rich are avoiding paying their taxes.
We must clamp down on the use of offshore havens to avoid paying tax.
Sure, avoidance isn’t illegal, but it’s morally wrong. To ensure companies are paying the tax they should, we urge the Government to implement a General Anti-Avoidance Rule, and to set up a robust register of beneficial ownership of companies, in the UK as well as overseas.
For nearly a decade the Tories have turned a blind eye to tax avoidance.
Labour will clamp down on avoidance and evasion and implement our Tax Transparency policy to build an economy that works for the many, not the few.
They are “umbilically connected” to the City of London, the report says.
Figures show nearly £14trillion a year of cross-border business in the form of companies investing in others is booked in the top 10 tax havens.
Of that, almost £5trillion ends up in the UK, its Crown Dependencies or Overseas Territories, says the TJN.
Havens allow firms to pay a tax rate of less than 3% on profits – the figure in some places is zero.
This, in turn, slashes how much corporation tax big businesses pay. The TJN previously estimated that multinationals avoid around £400billion a year in corporation tax.
While it did not put a figure on how much of it was due to UK tax havens, it may be over £100billion annually.
There are growing calls to clamp down on firms that, through clever accounting, deprive countries of tax.
The UK is ranked 13th on the TJN’s first Corporate Tax Haven Index.
It takes into account how much a place enables corporate tax avoidance and the scale of its corporate activity.
The Netherlands, Switzerland, Luxembourg, Singapore, the Bahamas and Hong Kong complete the top 10.
The report says through its network of satellite jurisdictions, the UK accounts for “over a third of the world’s corporate tax avoidance risks”.
TJN chief Alex Cobham said: “The hypocrisy revealed by the Tax Haven Index is sickening.
"The ability of governments... to tax multinational corporations to pay teachers’ wages [and] build hospitals... has been deliberately and ruthlessly undermined.
“Governments must deliver rules that ensure profits are declared, and tax paid, in the places where real economic activity takes place.”