It was fascinating to here lawyer James Quarmby of City of London legal firm Stephenson Harwood speaking about tax havens / secrecy jurisdictions in response to the letter from 300 economists saying that they must be abolished on the BBC Radio 4 Today programme this morning (at about 7.52).
First some background on James Quarmby:
James is a specialist in tax planning, wealth structuring and asset protection for international private clients. He leads our award-winning private wealth team.
I think the point is important. He denied tax was a part of the tax haven world now, but is a tax partner. Instead he resorted to the usual weasel words like 'neutral', which of course means 'no tax'.
And he denied that secrecy was relevant. He actually said 'let's not use the word secret again because it is not appropriate'. His reason is that secrecy jurisdictions may exchange information on beneficial ownership in the future.
This is nonsense. There are three reasons. First, we have no idea of places like the BVI have any clue at all who the beneficial owners of the companies incorporated there are. I am very sure they do not.
Second, as I have explained many times the UK will not be collecting this data - but will be asking for it on what will, in effect, be a voluntary basis since UK company law is almost wholly unenforced - and if this is the pattern replicated offshore then frankly the data will be useless.
And, third, secrecy will of course remain because the fact that a tax authority knows who owns a company is irrelevant. Limited liability is a privilege granted by society and we all have a right to know who is using it, or not, on public registers. The secrecy jurisdictions are not proposing public registers of beneficial ownership or true directorships let alone accounts on public record and so secrecy will remain nearly absolute.
Mr Quarmby is, in other words, not talking about the world as it really is. And that, I suggest is deliberate because, as he said, tax havens are fundamental to the world he works in. But that is a world that abuses the one I live in. Which is why they have to go.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
I heard this. He sounded like a cloth eared zombie.
I fully expected to hear Sarah Montague say: “And now we go over to Richard Murphy…” so that we could get that wonderful BBC thing – balance!
I was slightly frustrated that there was no one else in the studio
Richard
Why do you, or any other journalist or blogger, “have a right to know who is using it”? Surely it has absolutely nothing to do with you unless you are planning to trade with it, in which case you would insist on getting full due diligence on the company before entering a relationship with it. For investment holding companies who are not trading with any third parties, there is absolutely no need for anyone other than the tax authorities or law enforcement agencies to know who the beneficial owners are. Pure nosiness is not enough.
We have a right to know because society grants the right of limited liability and those who use it have a duty to explain how they do so, and do not abuse it
It really is very simple
Personally I think Limited Liability is also an untaxed privilege, but that’s another subject.
I agree
I argue for a premium for it
And I would have to pay
Richard
Where does any legislation say that please?
I think that’s what you think the legislation SHOULD be, not what it actually is?
Have you not realised that I am engaged in the process of effecting change?
taxing limited liability sounds very sensible. the rates should be set to recovery underpaid tax and NI resulting from insolvency and the associated costs of administration.
I would be interested to know who or what dreamt up this idea that limited liability is a privilege granted by society.
I thought it was provided for by law.
And how do you think law is created in a democracy?
Do you really think it a process of corporate capture that delivred it?
In which case have you confused the chicken and egg?
But you are suggesting that it’s already the law. It isn’t. And it may never be.
Please explain precisely what you are quibbling with
I am quibbling with your view that those who use companies have any existing duty to explain why and how they use companies. As of right now, no such duty exists.
Until and unless the law changes, such a “duty” is simply wishful thinking on your part. Just because you want it to be the law doesn’t mean that it is already the law.
Stop being silly
The Companies Act imposes such a duty on directors
Have you not noticed the obligation to account truthfully and fairly?
Don’t be ridiculous. You’re really clutching at straws now.
Once again, you are stating what you think the law SHOULD say, not what it actually says.
I really do think you will find accounts do have to be filed by law
It is you who is making stuff up
No Richard, not in all jurisdictions they don’t. Look it up.
So tax havens fail in their duty
As I have long argued
But that is deliberate abuse on their part
Because some people murder do you say all murder is acceptable? I thought not. Then do not extrapolate from abuse
But the “duty” that you claim exists does not actually exist. It is what you wish existed.
If you wish to lie please do it elsewhere
I am bored by your comments which are legally, ethically and factually wrong
What about the right of developing countries to know who exactly is ripping them off?
… and the rest of us!
As soon as I heard tax lawyer and that Sarah Montague would be interviewing him, I thought…why bother? He would make claims that shge was unable to refute or parse beyond a a scrpit of prepared bullet points she probably had in front of her. I mean when he said ‘let’s not use the term ‘secrecy’, it was her job to push back hard on that surreal statement that flies in the face of the whole brouhaha over the issue of tax havens [oh yes and he said he didn’t recognise the term tax havens either].
The Today programme really does itself a disservice when it offers up such weak kneed questioning. Evan Davis would have given the guy a bit more of a workout but really if the producers can’t provide an interviewer with the requisite knowledge then they should have had someone else being interviewed at the same time who had the skills to deal with the slippery specialist in offshore secrecy.
As soon as I heard tax lawyer and that Sarah Montague would be interviewing him, I thought…why bother? He would make claims that shge was unable to refute or parse beyond a a scrpit of prepared bullet points she probably had in front of her. I mean when he said ‘let’s not use the term ‘secrecy’, it was her job to push back hard on that surreal statement that flies in the face of the whole brouhaha over the issue of tax havens [oh yes and he said he didn’t recognise the term tax havens either].
The Today programme really does itself a disservice when it offers up such weak kneed questioning. Evan Davis would have given the guy a bit more of a workout but really if the producers can’t provide an interviewer with the requisite knowledge then they should have had someone else being interviewed at the same time who had the skills to deal with the slippery specialist in offshore secrecy.
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” (Upton Sinclair – https://en.wikipedia.org/wiki/Upton_Sinclair).
Goodness me – what have I been I saying about the need for people to develop a more ‘critical consciousness’ of the world around them?
I can’t help myself and must say the statement from Andrew above says it all really. It is a prime example of ‘naïve consciousness’.
PSR, have you published any essays on the topic of ‘critical consciousness’? Would love to read them if you have.
Paul H
I was introduced to the idea of ‘critical consciousness’ via the writings of Margaret Ledwith – a practitioner in community involvement/development in the delivery of public services. She may be a lecturer at the University of Lancaster……?
She takes ideas put forward by people like Antonio Gramsci that society is made up of a number of power bases and those working and living in the community need to be able to identify these power bases and analyse the roles of them critically in order to fully understand how they may impact on their own lives as well as how to work with these power bases in order to mitigate these effects. I think that there is someone else she mentions – Paulo Friere – themes of social justice and the political nature of education?
To be honest, my summary may not be adequate Paul as I was into this when I was a community development worker – but that was 6 years ago. I’ve done a lot since then.
Two texts by Ledwith are:
Participating in Transformation (1997)
Community Development; A Critical Approach (2005)
My own view at the time (influenced by Ledwith and her reading) was that there had been a form of critical consciousness raised in tenants movements but it was deeply flawed – for example how many people erroneously talk about ‘tax payers money’ – even now? I have never really liked to see end users of services co-opted onto management boards or say housing associations or schools as this effectively silences those who are appointed onto them as they become ‘members of the team’.
I always felt that tenants groups and P & T Associations should be on the outside of formal Governance structures of public services because it would lead to more external scrutiny. And that the law should underpin this relationship and make it as equal as possible.
I hope I’ve given you enough to go on your own way and happy travelling BTW.
What a classic example of trying to change the narrative and even the terminology to suit his own legalistic and self-centred perspective – we no longer have tax havens because they are now offshore financial centres!
Give a dodgy lawyer (or a dodgy accountant) an opportunity to make money and they will convince you that black is really white, a profit is really a loss, and a crime against humanity is a justifiable business opportunity.
A feel a new law is required, perverting the course of tax justice!
I like that
I like that