2009 September » Tax Research UK

As predicted – Jersey says Lloyds employee a ‘rotten apple’

Banking, Jersey, Tax evasion 10 Responses »

Sep 232009

Finance industry spokesmen have lined up to insist that the Lloyds salesman featured on Panorama’s bank ‚Äòexpos?©’ on Monday was not typical of Jersey’s banking sector.

They have insisted that his behaviour, and the advice he gave, was extraordinary and not symptomatic of a failing system.

Well if he’s not typical how come Panorama did two interviews, one in Guernsey and one in Jersey and both interviews suggested how tax could be evaded?

It’s time Jersey recognised that this story just won’t wash.

And it shouldn’t: the structure Lloyds is using is an international construction which can only have purpose, which is getting round the European Union Savings Tax Directive whose only purpose is to prevent tax evasion. That arrangement cannot have been created by the man interviewed on screen. It would have required high level approval. All he was describing therefore was a structure others, probably much more senior than him, had put in place. How then can he be ‚Äòa rotten apple’ or ‚Äònot typical’ in that case? Lloyds created a structure and he was selling that structure – and the aim of that structure is typical of what Jersey aims to do.

As a secrecy jurisdiction Jersey intentionally creates regulation for the primary benefit and use of those not resident in Jersey. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use Jersey also creates a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.

That’s the reality of Jersey. How come explaining it to a customer was in any way ‚Äòuntypical’?

The only thing typical here is Jersey’s lack of willing to face the reality of what it permits head on, and stop it. That reluctance amounts to just one thing: an endorsement of what was shown to be going on.

To put it another way: Jersey condones tax evasion. It has to. The Swiss have now admitted at least half the money in their country has been subject to tax evasion. This is also likely to be true in Jersey. Without tax evasion Jersey fails. This is the fact that Jersey dare not face. Panorama exposed it.

Lord Turner versus the Lord Mayor of London

Banking, Economics, Ethics 1 Response »

Sep 232009

Tax Justice Network: Lord Turner versus the Lord Mayor of London.

TJN commentary on yesterday’s continued brave stand by Lord Turner. I especially like:

Turner himself noted the vitriol he has received:

“One City practitioner declared himself ‚Äòappalled, disgusted, ashamed and hugely embarrassed that I should have lived to see someone who commands a senior and crucial important position as head of the UK regulatory regime, making such damaging and damning remarks’. Well, I am sorry I spoilt his breakfast.
. . .
I wonder whether this thoughtful soul realises that those sentiments are precisely what some of the victims of this recession feel about the excesses of some specific parts of the financial system.”

We want a green new deal

Green New Deal 3 Responses »

Sep 232009

The proposed Bank Code of Conduct

Banking, Code of Conduct 1 Response »

Sep 232009

The FT has noted:

Banks and their advisers have hit back at the government’s proposals to crack down on tax avoidance, claiming a new code of conduct would damage the competitiveness of the sector.

The Treasury’s proposed voluntary code to curb avoidance by banks was also lambasted as potentially unconstitutional and discriminatory in strongly worded submissions to a consultation that closes later this week.

This was the message the FT chose to headline. yet cutting out the more extreme views the Tax Justice Network view seemed realistic. We have submitted our own tax code of conduct with covering comments, interpreted by the FT as:

The Tax Justice Network, a campaign group, argued against limiting the code to the banking sector and said it should apply to an entire bank and not only its UK operations.

It’s a view the Chartered Institute of taxation seem to endorse:

The Chartered Institute of Taxation said to limit the code to banks might amount to discrimination under European Union law. It called on the Treasury to state clearly there was no intention to extend the code to other taxpayers.

Of course, I’d argue it should extend it. But the British Banker’s Association might also see merit in our position:

The British Bankers’ Association said it was committed to working with the government to find “a sensible and practicable” solution. “We are firmly of the view, however, that an international approach works better than a series of national approaches,” it said.

I like the TUC position:

Brendan Barber, the general secretary of the TUC, said: “Moves to improve tax compliance amongst banks are timely and welcome.”

“However, there is no evidence that banks will comply with the requirements of any code. As such, the TUC believes a statutory basis for the code is essential so that those who transgress can be prosecuted.”

I have a strong suspicion that this is where this is heading. As the Law Society noted:

The Law Society said the code “comes dangerously close to departing from the fundamental constitutional principle that a tax should be imposed by law, not by executive action”. It voiced concern that the Revenue would take on a “quasi-judicial” function, cutting across separation of powers between legislature, executive and judiciary.

So let’s make it law and be done with it. Because candidly, as the FT notes, the banks aren’t committed to this so why not impose it? That’s where a general anti-avoidance principle enshrined in law would come into play.

Evil Plans – be an artist

Blogging Comments Off

Sep 232009

Evil Plans – be an artist | AccMan .

Dennis Howlett on making a difference – and blogging

Worth a read for all who are in doubt

The best reply to Jersey

Banking, Corruption, Jersey, Tax evasion Comments Off

Sep 222009

The best reply to Jersey’s politicians concerning their feeble response to the Panorama on Lloyds is on the comments page of the Jersey Evening Post. It says:

Frankly it matters little what we on the Island think, it’s the impression that was given to the UK based audience and of much more significance the UK Government that matters.

For far too long our brave politicians huff and puff but the reality is that the world is changing, and whilst the OECD started the accountability game, the credit crisis will finish it.

The appropriate response to this issue should have been an immediate, transparent and public censure of the corporate governance of Lloyds in Jersey, not the buck passing attempt to avoid the real issue demonstrated today by our politician(s) and Jersey Finance.

There’s nothing to add to that.

Liechtenstein signs tax deal with Monaco

Liechtenstein 1 Response »

Sep 222009

Liechtenstein signs tax deal with Monaco – Finance – MSN Philippines News – News.

Every time another farce like this happens the OECD ‘international standard’ of 12 Tax Information Exchange Agreements looks more and more ridiculous.

In poor company

Secrecy jurisdictions Comments Off

Sep 222009

The City of London has just published its latest Global Financial Centres Index. As it says:

Ah, what a bunch of secrecy jurisdictions.

Is being in this company anything to celebrate?

‚ÄòTax dodge’ TV show condemned

Jersey, Secrecy jurisdictions, Tax evasion 26 Responses »

Sep 222009

‚ÄòTax dodge’ TV show condemned ¬ª Business ¬ª This Is Jersey.

The Jersey Evening Post has written:

DAMNING allegations on the BBC’s Panorama programme that a Jersey bank worker advocated dubious tax dodging have been dismissed as ‚Äòsloppy journalism’.

Treasury Minister Philip Ozouf said that there were so many unanswered questions from last night’s prime time report that it was impossible to draw any firm conclusions from the programme.

This is ludicrous: he did so himself, saying:

However, he said that comments made by the Lloyds TSB Offshore worker, who was caught on secret camera explaining how to ‚Äòget around’ EU tax rules, appeared highly inappropriate and were being investigated.

And he said that he would instruct the Jersey Financial Services Commission to use its own undercover customers to ensure that banks were operating within the rules.

So at the very least he thinks the BBC used a valid technique and found a real problem. So much for sloppy journalism.

And another Jersey official has chosen to comment inappropriately:

John Harris, the director general of the JFSC, said: ‚ÄòI do not think it was the BBC’s finest hour. I don’t think the programme was entirely right.’

He stressed that Jersey had very robust and comprehensive anti-money-laundering systems in place, as evidenced by the recent IMF report.

Two comments again. First, if the programme was not entirely right, why not? I have seen the whole transcript of this interview. It is right, let me assure you.

As for the IMF report – it is now shown to have been asking the wrong questions and thereby getting the wrong answers. That’s the reality of the assessment programme. The BBC rumbled that in one simple exercise that has shown the truth about what happens in Jersey.

But as ever its politicians and officials exonerate abuse. This is unsurprising. The place is an secrecy jurisdiction after all: secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.

If you can deliberately set out to create and support a secrecy jurisdiction you can easily gloss over a programme that shows the abuse you deliberately permit through creation of the veil of secrecy that only secret filming could crack.