UK Paper Brands Bermuda A ‘Tax Haven’

Bermuda is named as a “tax haven” in a UK “Daily Mail” report today [Jan. 23] about how Britain’s top 20 firms avoid millions of pounds in taxes by operating a network of off-shore subsidiaries.

The special “Mail” investigation — illustrated with a photo of the Pitts Bay Road waterfront — was prompted by Labour Party Member of Parliament Chuka Umunna’s questioning of Barclays banking boss Bob Diamond during a recent Westminster hearing on corporate tax avoidance in Britain.

Mr. Diamond confirmed to the Parliamentary Treasury Select Committee Barclays had  300 subsidiaries in tax havens.

“‘Tax avoidance by large companies on a massive scale has been ongoing for years and it is time this Government got a grip on it,” Mr. Umunna told the “Mail”. “This is costing the Exchequer in excess of £25 billion a year. We could reduce this deficit by clamping down on loopholes and ensuring Revenue & Customs has the resources to do this.”

The “Mail” said among the biggest operators of off-shore subsidiaries was multi-national petroleum giant BP, ”with 85 in ultra-secret jurisdictions.”

A spokesman for BP said it had only 67 companies registered in off-shore territories. “Bermuda and Luxembourg together account for two-thirds of these — Bermuda mostly because many BP shipping — related companies are based there and Luxembourg because of our pan-European trading and marketing activities.”

Shell operates 47 off-shore subsidiaries, mainly in Bermuda, although the company told the “Mail” its holding group, Royal Dutch Shell, is based in the Hague and not British tax-resident.

The role off-shore business domiciles like Bermuda play in corporate and personal tax avoidance has become a major political flashpoint in the UK in recent months.

Last month the “Financial Times” referenced Bermuda twice in an editorial on the nationwide “Pay Day” protests, street demonstrations prompted by mounting anger over companies and individuals  which legally “dodge the taxman” by exploiting loopholes in their home countries’ tax codes.

“With tax bills going up even while public services are being cut, the British public was in no mood to listen to legal niceties when multi-billion dollar corporations attempted to explain why they are entitled to try and minimise their tax liabilities,” said the “Financial Times”. “I suspect that this is what most annoys objectors to companies’ tax arrangements — it is not just that they believe companies are evading their responsibilities at a time when taxpayers face the slashing of their services.

“It is that it all seems so contrived. Ordinary people cannot work in Pittsburgh and pay (or not pay) tax in Bermuda, or live in Birmingham and enjoy Geneva’s tax rates. Why should companies be able to do so?”

And earlier this month Nicholas Shaxson — an Associate Fellow of  the Royal Institute of International Affairs and a consultant for global watchdog organisation Tax Justice Network —  highlighted Bermuda as a key player in the off-shore tax avoidance network in his new UK bestseller “Treasure Islands, Tax Havens and the Men Who Stole the World.”

#BermudaBusiness #UnitedKingdom

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