Crown Dependencies 'world’s largest tax-evasion network': UK shadow home sec

Abbott said that she welcomed the “measures to bear down on tax evasion” and welcomed the provision that makes it a criminal offence for corporations to fail to stop their associated persons facilitating tax evasion, in the bill.

But it is Abbott’s accusations against Jersey, Guernsey and the Isle of Man, being part of the ‘largest tax evasion network in the world’  that will will anger many industry observers.

‘Startling oversight’

“We particularly welcome the fact that this will have extra-territorial jurisdiction,” she said. “However, we regret that in the tax evasion measures (in part 3 [of the bill]) there is no reference to the British overseas territories and Crown Dependencies. That is a startling oversight.

“There are three Crown Dependencies, Jersey, Guernsey and the Isle of Man, and it is frequently argued that the British overseas territories and the Crown Dependencies are the largest tax evasion network in the world, so the failure to mention them in a bill which purports to deal with issues surrounding tax evasion is a major omission

Panama Papers

Abbott also pointed to the 14 British overseas territories, singling the British Virgin Islands (BVI) out as it is mentioned “no fewer than 113,000 times” in the so-called ‘Panama Papers’ data leak from earlier this year.

“BVI, with a population of just 29,000—fewer than my own constituents in Hackney—is home to 452,000 international businesses,” said Abbott. “Maybe the 29,000 population is particularly skilled at accountancy and banking, but maybe some of those business entities are shells for tax evasion.”

The bill eventually passed second reading without a division and will now be considered by the Public Bill Committee.