UK PM May, Treasury pledge to curb use of offshore tax havens

UK prime minister Theresa May has ordered a crackdown on individuals and companies’ use of offshore tax havens as part of her drive to “reform capitalism” after the BHS scandal.

May’s pledge comes at the same time as findings from a special report into combating tax evasion were released earlier today by the UK Treasury department.

From a report by the National Audit Office, the Committee of Public Accounts took evidence, on 13 January, from HM Revenue & Customs on its approach to tackling tax fraud. The committee published its report on 15 April with the government publishing its response to the committee’s report today.

The committee said that HMRC must do more to tackle tax fraud and counter the belief that people are getting away with tax evasion. It needs to increase the number of investigations and prosecutions, including wealthy tax evaders, and publicise this work to deter others from evading tax and to send out a message that those who try will not get away with it

Taking action

The report said that HMRC is looking for ways to improve compliance and tackling non-compliance, such as: investing in digital technology; taking action against people who hide assets in the UK or offshore to evade tax and those who support them; and, taking steps to reduce the illicit trading.

As reported in today’s The Times, the UK prime minister has said that she is keen to curb the use of offshore tax havens in the future. The Times reported that it was suggested that Sir Philip Green and his wife, who is based in Monaco, used private companies registered offshore to reduce tax bills on cash extracted from the UK high street chain before its collapse, according to MPs.

House of Commons committees

The Times reported today that two House of Commons committees said that the “moral case” for paying UK tax on profits made in Britain was “evidently not a consideration for Sir Philip” and that his use of offshore companies had reduced “corporate transparency”.

The prime minister restated her commitment yesterday to clean up business after the indictment of the retail boss Green as the “unacceptable face of capitalism”.

The collapse of BHS led to the loss of 11,000 jobs and left 22,000 pensioners facing reduced payments because of a £571m hole in the pension fund.

Offshore tax 

The UK prime minister’s spokesperson told The Times that Mrs May was determined to curb “irresponsible and reckless behaviour” by business bosses. The prime minister will not comment directly on Sir Philip while a Whitehall committee decides whether to strip him of his knighthood, but she has told officials to examine what can be done to ban offshore tax arrangements similar to those used by the Green family.

The Times added that is expected that draft proposals could be ready in time for the UK Conservative party conference this autumn. There is no suggestion that Sir Philip Green was engaged in tax evasion, it said.

Other policies to clean up big business already outlined by Mrs May include legislation to cap bonuses, allow shareholders to block bosses’ pay rises and put workers and consumers on company boards.

 

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

Read more from Gary Robinson

preloader
Close Window
View the Magazine





You need to fill all required fields!