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UK PM wants greater tax transparency in crown dependencies
"The Prime Minister also met this week with Michael Foot who is leading the independent review into British offshore financial centres announced in the PBR. The Prime Minister emphasised the importance of the review and stressed the need for our crown dependencies and overseas territories to be ready to adhere to the new international standards on tax transparency."
As predicted by the Manx Herald following the G20 Summit and the publishing, by the OECD, of new lists of ‘cooperative’, and less ‘cooperative’, tax jurisdictions, the IOM has not had long to wait to find out what Gordon Brown really thinks of the state of play between the ‘larger’ nations and ‘small’ ‘low-tax’ offshore finance centres.
A letter has apparently been sent by the PM to the crown dependencies, including the IOM, and overseas territories telling them if they think they are in the clear, by being on the ‘white’ list, they can think again.
It is obvious from the tone of the press statement, the use of ‘offshore’ centres, for the purposes of perceived ‘tax avoidance’, by UK companies and individuals is not going to be tolerated; and that the UK is expecting the IOM, and others, to become even more ‘open and transparent’ in respect of tax affairs.
The full wording of the briefing note is reproduced below.
A Downing Street spokesperson said:
“The Prime Minister has today written today to the UK’s crown dependencies and overseas territories to urge them to improve their tax transparency in line with the agreement reached at the London G20 Summit last week.
"In his letters to the UK's overseas territories on the OECD’s ‘grey list’, the Prime Minister makes clear that their commitment to meeting the international standard needs to be implemented and at least 12 agreements signed by September if sanctions are to be avoided.
"The Prime Minister also wrote today to the UK's crown dependencies (Jersey, Guernsey, and the Isle of Man) to make clear to them that he welcomes the progress made in signing at least 12 bilateral agreements but that this standard should be seen as an indicator of tax transparency rather than all that is expected of them. He stressed that he expects them to continue to make genuine progress beyond the current minimum and that if progress does not continue he will encourage the G20 to look at the issue again and raise the bar until all abide by the highest standards.
"The Prime Minister welcomes the OECD's announcement on Tuesday that the four blacklisted countries identified by the OECD have since written to them committing to implement the international standard on tax information exchange. This lifts them off the blacklist. [See: http://www.oecd.org/document/0/0,3343,en_2649_34487_42521280_1_1_1_1,00.html]
"But the Prime Minister’s commitment to addressing tax havens is not limited to dealing with tax evasion. He is also committed to cracking down on tax avoidance.
"To this end he wrote to the OECD last week to ask them to restart their work to target tax avoidance. In his letters to the crown dependencies and overseas territories he makes it clear that they need to prepare to meet the new standards on tax avoidance that will come from the OECD’s work.
"The Prime Minister also met this week with Michael Foot who is leading the independent review into British offshore financial centres announced in the PBR. The Prime Minister emphasised the importance of the review and stressed the need for our crown dependencies and overseas territories to be ready to adhere to the new international standards on tax transparency."
The Manx Herald reckons this will produce the usual response from the Manx authorities; partly defensive and partly agreeing to work with the UK authorities, in what ever respect necessary, to allay any concerns that the IOM is a ‘secrecy’ jurisdiction.
Whether this will result in an easing off of the ‘squeeze’ being applied to the IOM remains to be seen; or whether it will speed up the ‘relocation’ of business to ‘onshore’ jurisdictions or to places where the UK Government can exert less power and influence.
The official response from the IOM Government is expected later today.
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However some people do locate their savings on the island simply because they are unable to open a bank account anywhere else - or because they have been seduced by an investment fund’s glossy brochure.
These people are not dodging the taxman and so have nothing to hide although on occaisions the Island’s regulatory authorities appear to treat them as an inferior life form.
Tax havens in general are responsible for the UK suffering a massive loss of corporate and personal income tax revenue…. Innocent British tax payers suffer and developing countries endure losses up to $l60 billion a year in corporate tax revenue.
The UK government must establish the constitutional and oversight relationship it has with semi-autonomous tax havens such as the Isle of Man to ensure that the UK exchequer receives appropriate contributions and the regulatory authorities comply with professional standards.
To quote one influential UK politician - “Our taxmen are like fat policemen running after a speeding Ferrari; they need all the help that they can get."
The IoM Government has nothing with which to bargain to resist the disclosure & rooting out of abhorrent banking practices on the Island that enable ultra-rich people to illegally evade paying tax.
Middle Britain is sick & tired of paying for everything whilst fat cats and their hangers-on swan around the world in obscene luxury. The Crown Dependencies of the IoM, Jersey & Guernsey will be the first to be required to meet the new regulations to stamp out tax evasion & secret bank practices that are a contributory factor in the international financial crisis.
The exodus from the Island of deposits and financial agencies has already begun. The AAA credit rating is less valid now than it was in February.
Jim
The UK Government have been devious, nasty, negligent and morally corrupt. The IoM Government have really just been naive fools.
And stuck in the middle, being used as disposable pawns, ordinary everyday folk. One or two rich fat cat tax dodgers, maybe. But on the whole, ordinary everyday folk.
It has been a shameful six months for the UK Government and I hope the Manx people realise that we were never at odds with them and that their House of Keys is more a club than a serious Government.
With the current KSF IoM fiasco it is likely that there is now less money being invested thrugh the City of london than there was before KSF IoM was taken into administration. It has been said that the City of London is one of the largest offshore centres in the World.
Yes the Island is a shady place attracting shady characters encouraged by an increasingly shady government. Some Isle of Man based investment schemes were sold with the assistance of commission-driven, unqualified, unregistered, heartless, smooth talking conmen to pensioners in their seventies.
This amounts to nothing less than abusing the elderly and robbing the aged of their life savings.
The perpetrators of these schemes are in many instances highly skilled and seemingly professional and trustworthy businessmen. Such con-artists can take even the most wary of us off our guard.
What has the Financial Supervision Commission done about it? Nothing!
Give the islanders 48 hours to leave and then hand it over to the RAF, Army and Navy for target practice?
On second thoughts at least we know the whereabouts of these shady characters so better to fence the place off and keep them under ‘island arrest’ powerless to rob any more innocent people.
What about the effect of the UK's tax transparency demands? Who's got the data on what the economic impact of this is on the Isle of Man? Are we to be kept in the dark?
Am I right in believing that when there is no tax incentive to "offshore" the money, that much of it will stop being placed "offshore"?
The comfort, relief Mr Brown, and various other MHKs felt after the stamp of approval from the G20 and Mr Foots visit was obvious. Makes you wonder what they were worried about, does it not?
Does it not occur to Mr Brown that it is obvious that the IoM-s recent push to sign some belated bi-lateral agreements actually fools no-one.
The measures of Obama are not only a muisance they are going to redirect billions of dollars.
The situation with the UK is not so clear. The behaviour of Barclays stands out. If the UK cleans up their own act then the financial advantages the IoM enjoys from the muddy waters will change. Who knows how much.
Meanwhile I look on with bemusement.
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