Jersey » Tax Research UK

Simon Jenkins on tax justice

Cayman, Jersey, Tax Havens, Tax justice 8 Responses »

Dec 212011

A decade ago an article like this would not have happened.

It does now.

Don’t say changing moods is not possible.

This is Simon Jenkins in the Guardian today (edited, of course):

Osborne is the scourge of public sector unions and condemns tax avoidance, yet he refuses to end the scandal of crown tax havens, from Jersey to the Caymans, that enjoy the benefits of British citizenship while enabling individuals and corporations to evade British tax. Last week the European Union lectured Britain on financial regulation, while harbouring on its borders such fiscal black holes as Monaco, Liechtenstein and Switzerland. The thesis, accepted by governments of all parties, that the rich should be allowed to escape tax for their “wealth-creating potential” has surely been exploded by the credit crunch. It is not the kind of wealth Britain can afford. If Goldman Sachs dislikes paying British taxes it should go to Dubai, not just the first-class lounge at Heathrow.

The control of public expenditure is never perfectly equitable. It is war by other means. But when large sections of the public are being asked to bear the burden of cuts in their standard of living – largely through the action and inaction of government – they are entitled to see at least a semblance of fair play.

Just because lobbyists say bonuses and tax havens are “essential to Britain’s recovery” does not mean they are. The government’s tolerance of both is more than stupid. It induces cynicism in the public realm and recruits fair-minded people to the cause of St Paul’s protesters and public sector strikers. Nothing is more crucial to national wellbeing at a time like this than a sense of equality of misery. The British government derides Greece and Italy as countries where taxpaying is “voluntary”. It appears to be voluntary in Britain too.

He’s right.

Creating this awareness has taken a lot of effort. Now we need action to address the issues. When will people get serious about the Tax Gap? It’s entirely possible to do so. But only the Greens take it seriously as yet. That’s to their credit, and none to anyone else.

Jersey – hoping on an EU failure

Jersey 6 Responses »

Dec 142011

Jersey seems to think the UK’s falling out with the EU could be good for it. I doubt it.

Of course, if the UK leaves the EU then life gets easier for Jersey - none of the EU’s directives will apply to it then and the rules of the game change. No doubt Jersey would love that. But it’s very unlikely to happen. I don’t see us leaving the EU.

If then, as is is more likely Cameron and the UK stay in Europe, sympathy with the UK and its financial system will be low. In that case Jersey should expect the going to get much much tougher.The odds are stacked against the UK and its tax havens. In that case Jersey may have got it all wrong, again.

As I think likely.

Sometimes you just have to laugh

Jersey 5 Responses »

Nov 232011

This comment was in the Jersey Evening Post, from Geoff Cook, the head of Jersey Finance, which markets the island’s financial services sector:

In a career spanning over 30 years in financial services, which has taken me across the globe, I have discovered no jurisdiction that has such a commitment to truth, transparency and integrity as Jersey.

Our reputation is everything, we guard it jealously, and defend it vigorously. If we can act to assist those who are less well-off while upholding the principles of international law, we will, and as quickly as we can.

Well sometimes you have to laugh or you’d cry.

Let me ask Geoff about these commitments to transparency:

Why is it possible for vulture funds to use Jersey?
Why can no one see the accounts of a Jersey company?
Why is it usually impossible to find out who owns or controls a Jersey company?
Why do you allow sham trusts that let the settlor also be the beneficiary and to control the trust – a concept alien to real trust law?
Why won’t you fully information exchange under the European Union Savings Tax Directive?
Why does the UK think you non-cooperative for information exchange purposes?
Why have you not signed tax information exchange agreements with almost any developing country?
Why do so many scandals and frauds seem to find their way to Jersey?
Why do so many banks have so many subsidiaries in Jersey about which no one knows anything?
Why has Jersey helped to undermine the PAYE system in the UK through the use of employee benefit trusts, and so repeatedly?
Why has Dave Hartnett had to say the informationexchange deals with jersey don’t give him all the information he needs?
Why did you fight so hard to charge no tax on offshore companies using Jersey whilst increasing it heavily on the people of your island?

Go on Geoff: just answer, in full.

And tell us whilst you’re about it when the commitment to transparency and poor people will come into play?

Or will you duck this as you do all our other challenges because you know you can’t answer?

A hero bows out

Guernsey, Jersey, VAT Comments Off

Nov 172011

Richard Allen, who has tirelessly campaigned against VAT abuse from the Channel Islands, and who has won his campaign to end this abuse, has signed off his blog dedicated to this issue since this is a campaign that can safely be said to have concluded.

Richard never imagined he’d be a tax campaigner. Indeed, in many ways he wasn’t. He wanted a level playing field for business freee from the distortions that tax abuse can create.

I salute his work. He’s thanked me on his blog – but this was really his campaign and without his work it would not have been won. He’s a real hero. And so I share the video he put up to signal the end of his work, and look forward to the day when we can say the same for tax havens as a whole:

Guernsey company threatens to take UK to court on VAT abuse

Guernsey, Jersey, Tax Havens, Uncategorized, VAT Comments Off

Nov 112011

A Guernsey company is threatening to demand a judicial review in the UK of the decision to end Low Value Consignment Relief from Guernsey and Jersey in April next year to sop the long running VAT abuse these islands have tacitly encouraged. As the BBC reports:

Guernsey firm Healthspan has announced it is launching a legal challenge to the UK’s decision to end VAT relief on Channel Island goods. Derek Coates, the group’s chief executive, said: “We are in the process of launching a legal challenge, perhaps in the form of a judicial review.” He said it followed advice from accountants and UK lawyers and would be pursued “on the basis of discrimination against the Channel Islands”.

He justified this by saying:

“What is surprising and disturbing for all the Channel Islands is the way the UK have treated our islands with such disdain. They have taken no steps to stop LVCR imports from any other country outside the EU including Switzerland, Cyprus, Hong Kong, the USA or China.”

My advice to Mr Coates is he should not waste his money. As Richard Allen at RAVAS explains:

A group of retailers headed by a Health supplement mail order company is threatening to take the UK Government to Judicial review over the removal of LVCR from the Channel Islands. It is not understood exactly what the challenge would be but since the UK not only has the option to allow or disallow LVCR but also the discretion to apply LVCR in a manner that prevents tax avoidance and the abuse of the relief, the argument would appear to rest on whether or not operating a mail order and fulfilment business from the Channel Islands, in order to use LVCR to retail VAT free on the UK mainland, is an abuse .

RAVAS understands that the UK Government took action after clarifying the legal issues with the European Commission who are not only supportive of the UK’s removal of LVCR from Channel Island mail order goods but responded to a complaint from RAVAS that the UK had failed to take action to prevent an abuse of the import VAT relief. The UK is obligated by both the LVCR Directive and the Principle VAT Directive to prevent LVCR being abused and used for tax evasion and avoidance particularly if it leads to a distortion of competition in the UK. One of the measures available under the LVCR directive to combat abuse is to exclude mail order goods from the relief.

In other words – a judicial review has no hope at all.

Time to accept the abuse is over, I say.

Yikes! – Christensen and Murphy together – don’t tell Jersey

Jersey, Richard Murphy, Tax Justice Network 6 Responses »

Nov 092011

Just noticed this on Facebook…

Me and John Christensen together.

Enough to cause considerable distress in Jersey!

Who is paying for Jersey to be a tax haven?

City of London, Corporation Tax, Economics, Guernsey, Isle of Man, Jersey, Secrecy jurisdictions, Tax avoidance, Tax Havens, Uncategorized 24 Responses »

Nov 072011

The reason why places like Jersey became tax havens was to raise tax revenue from third parties. The tax revenues raised were, in effect, export earnings that kept their economies afloat.

Deputy Geoff Southern in Jersey has tabled an amendment to the current Jersey budget that shatters the myth that this is still the case. As his amendment says:

Geoff is right to acknowledge there is a race to the bottom in Jersey, Guernsey and the Isle of Man. Promoted by the pinstripe infrastructure of lawyers, accountants and bankers through such coordinating bodies as the Society for Trust and Estate Practitioners (who have their single biggest branch in Jersey but who are active in all three locations) the pernicious influence of these groups has driven these three jurisdictions on a destructive path towards shattering their tax base by eliminating corporate taxes for their clients.

The result is all too apparent. The tax burden has shifted dramatically from businesses using Jersey as a tax haven to the local population who are now paying for the privilege of hosting the tax abuse industry whilst at the same time their economy is facing ruin as local politicians realise they have no idea how to plug the continuing deficits they face and are now suggesting plundering the rainy day fund – a sure sign they are on the slippery slope to running out of money, as I have long predicted.

Geoff Southern has in this case study provided the evidence of what I and the Tax Justice Network have long argued – that the ‘race to the bottom’ in corporate taxes is simply an excuse to shift the tax burden from those able to pay tax (let’s call them the 1%) on to those less able or unable to afford them (again, for simplicity, let’s call them the 99%).

This is happening everywhere but Jersey’s clearly leading the way.

This is what the Tax Justice Network is about.

This is what #occupy is about.

Beating this pernicious process is what re-engagement in democracy should be about for many who feel disenchanted by it.

And this is what beating the exploitative activities of the City of London – the most undemocratic local authority in the UK – has to be about.

They’re going to love this in Jersey

Jersey, Tax Havens Comments Off

Nov 022011

Accountancy Age have just published a report on Mark Field MP and his comments on tax havens, covered here yesterday.

What amused me was their graphic:

Jersey are going to love that one! I wonder how long it will take for Geoff Cook to explode in rage?

The end of Channel Islands’ VAT abuse is nigh

Guernsey, Jersey, Tax avoidance, VAT 24 Responses »

Nov 012011

As the BBC reports in Guernsey this morning:

A reduction in VAT relief on parcels sent to the UK from outside the EU [introduced today] is unlikely to be the last change, according to the UK Treasury.

The tax is not paid on goods below the Low Value Consignment Relief (LVCR) threshold, which changed from £18 to £15 on 1 November 2011.

The Channel Islands are among locations that have been seen as bases for the exploitation of the “VAT loophole”.

A Treasury spokesperson said further changes were being investigated.

The spokesperson said: “We are exploring options to further limit the relief so it can be longer be inappropriately exploited.”

An email in my inbox says expect an announcement soon, possibly today.

And I know that at least one fulfilment company is now laying off staff in the Channel Islands in anticipation of the move.

It’s game over for another Channel Ilsands’ abuse and another win for tax campaigners.

Now when will the Channel Islands realise it is time to rebuild their economies on the basis of something more solid than tax abuse?