Gordon Brown has announced that he intends to take a tougher stance on the world’s biggest tax havens. He seems to be particularly fixated with Switzerland, whilst Barak Obama made similar comments relating to The Cayman Islands during his Presidential campaign. Speaking at his monthly press conference, the Prime Minister said…
“We want the whole world to take action. That will mean action against regulatory and tax havens in parts of the world which have escaped the regulatory attention they need. The changes we make will have to apply to all jurisdictions around the world.”
HM revenue and customs reckon that the amount of company money being taken out of the system could be anything between £3.7bn and £13bn which is the kind of money our government clearly needs as it tries to spend its way out of recession.
Other members of the G20 lose similar amounts which means, that the world’s main industrialised countries could be losing well in excess of £100bn a year. Mr Brown said yesterday he was “more confident now having talked to [other] world leaders that we are in a position to take action on this matter”.
This is seen as the next step in dealing with this problem. Last year I did an article highlighting EU Governments efforts to track down individuals who avoid taxation in this way. It’s still very relevant to read today, especially if you have money salted away offshore. Whilst it has been moderately successful it only scratches the surface because if you want go right to the heart of it you have to deal with the tax havens themselves. That is why Brown is desperate to get international agreement.
The plan will have three key elements:
- Focusing on big corporations that use tax havens.
- Clamping down on individuals who avoid tax.
- Tightening the regulation of the markets
Britain believes that billions of pounds in transactions take place between international banks without so much as a reporting mechanism in place never mind regulation.
So how do you feel about Gordon Brown’s latest initiative? Is it right that the UK Government now has special powers (see my last article on HMRC Tax Investigation) to rifle through the bank accounts of individuals here or even the accounts they may hold privately offshore?
As I reported previously, the Inland Revenue paid an informant £100,000 to get hold of secret data on British citizens with offshore accounts held in Lichtenstein. Was the securing of that stolen data for money really an ethical act by HMRC?
On the other hand is it right that companies and individuals should salt away billions in offshore accounts causing the rest of the tax burden to rest on the shoulders of the 99% of law abiding honest tax payers?
I’d be curious to hear your thoughts on this one – do you see what I’ve raised above as Tax Evasion? Or would you see it as simply ‘Wise’ Tax Planning ie (supposedly still legal?) Tax Avoidance to use an offshore account? What do you think?
As usual feel free to comment on the above article. I’m always interested to hear your opinions.
