As the Mail on Sunday reports today:
When Barclays boss Bob Diamond confirmed that the bank had about 300 subsidiaries in tax havens there were gasps of dismay at a Treasury Select Committee hearing earlier this month.
Few at the highly charged meeting would have believed such a vast network of offshore companies existed, potentially allowing the bank and its clients to avoid huge sums in tax. They would still be in the dark had MP Chuka Umunna not put the figure to Diamond in the first place.
But a Financial Mail investigation can reveal that Barclays' Byzantine structure is far from unusual. In fact it is more the tip of the iceberg as far as Britain's biggest companies are concerned. More than 1,000 subsidiaries in offshore tax havens are operated by Britain's 20 biggest companies alone.
They also produce a table:
I have a pretty strong suspicion the estimate is understated - and does not use as its basis the full list of secrecy jurisdictions that the Tax Justice Network suggests appropriate.
The report, which I think is mainly yore work of Alex Hawkes, who has had long term interest in such issues and with whom I have spoken over many years, reveals some interesting twists, not least this:
Among the biggest hoarders of subsidiaries - with 85 in ultra-secret jurisdictions, according to Companies House - is BP. In an ironic twist, its head of tax, John Bartlett, was this month appointed by the Government to sit on a study group on tax avoidance. According to the Treasury, the group 'is part of the Government's commitment to tackling tax avoidance and building sustainable defences to address long-standing avoidance risks'.
I'm well aware excuses are offered - but are excuses good enough?
This issue is endemic in corporate Britain - or is it worse than that? Is it actually pandemic? And is this the corrosive cancer that is eating away at corporate ethics, governance, responsibility and in itself undermining the credibility of corporate life? I think it is. The Mail seems to think it is. And is that why we're not 'all in tis together'?
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A quick question? Are there figures available from the HMRC, Treasury or the ONS that show the fraction of the total tax take that has been paid by corporations over time.
Is this fraction declining?
I presume John Bartlett was appointed to ensure that the status quo continues.
Articles such as this make so much more sense to me after reading Treasure Islands. I can’t really say much more than that other than to recommend the book to anyone interested in world business or indeed the modern history of our world.
http://www.iomtoday.co.im/news/isle-of-man-news/the_hub_of_a_global_shipping_empire_1_2939145
What you call ‘Britain’s biggest companies’are nothing of the sort, they are multinational with a duty to their shareholders, who are also multinational. Tax avoidance is legal.Differing tax systems and rates between countries make this non scandal a fact of life.
Richard – a quick question for you? Are you stating that if a multinational group has one subsidiary in a tax haven or “secrecy jurisdiction then this is solely for the purposes of avoiding tax or to obscure transparency?
@william
If they are making profits in France: they should pay tax there, if in the US: pay them, and if here: pay us.
Please though Tesco don’t tell us you are an multinational company making a fortune selling doughnuts in the Caymans.
Oh and by the way william all those banks in the list would be bankrupt if we hadn’t bailed out the system. They are all British when it suits them.
Quote from the article:
“HSBC has 62 firms in offshore centres, mostly in the Channel Islands and the Isle of Man. The bank said it was only offering retail banking services to local customers.”
This is very strange! You only have to look at their website, to see this is wrong.
http://www.offshore.hsbc.com/1/2/
But, this is just the usual shoddy, slap-dash, Daily Mail reporting!
This “avoidance” may be a fact of life, but it doesn’t mean that such is ethically, morally or even legally right. Transparency is everything. We know nothing of these offshore accounts, what we do know is that such are created to defeat transparency, and as such, one must be highly suspicious of what these accounts represent. At a time when the poor and many other less well-off citizens are being required to tighten their belts or spend many thousands of pounds on their education, when it is likely that many billions of pounds that legally belong to the citizens of the UK are instead diverted and secreted away where only those in the know can access them, then this is, apart from being economically obscene, intensely antidemocratic. Whole nations and societies can crumble when the citizens personal investment in society is abrogated in this way by powerful cliques.
@Richard
No
But they should be willing to account for it
If they don’t – how do I know what it is for?
@Stephen
Yes – but I haven’t time to post it now….sorry