The deputy premier of Bermuda has hit out against British MPs’ attempt to force offshore companies to name their owners and plans end offshore financial secrecy, claiming that the UK itself is a “tax haven”.
Speaking ahead of Wednesday’s meeting between UK prime minister Theresa May and the leaders of Britain’s overseas territories, Bermuda’s deputy premier and finance minister, Bob Richards, hit out against proposed legislation that would create public registers naming the owners of offshore companies.
According to a report in UK newspaper The Guardian Richards claimed that the UK “is a tax haven,” and should get its own house in order before making demands from its dependencies, citing non-dom laws that allow foreign nationals to live in Britain without paying tax on overseas income.
“You have more billionaires resident in London than any place on earth. They are not here for the weather, they are here for the tax climate.
“We have a double standard going on here,” he said.
Bermuda deputy premier’s outburst comes at the same time as a report has highlighted that the amount of global investment flowing through tax havens has risen by US$700bn in two years.
According to reports on global finance website Public Finance International the non-governmental organisations (NGOs) evaluation of data from the International Monetary Fund has highlighted a 5% increase in investment moving through tax havens between 2013 and 2015, from US$11.8trn to US$12.5trn.
The analysis published through ActionAid, an international charity working in over 45 countries, said that the growth was “notable” because in 2013, G8 leaders signalled a renewed commitment to crack down on tax evasion and avoidance, in particular large companies that secreted their profits in tax havens.
ActionAid published its analysis to coincide with the meeting between the UK PM and the leaders of Britain’s overseas territories in London on Wednesday, pointing that corporate investment in 2015, saw US$1.1trn moving through the British Virgin Islands US$710bn through Bermuda and US$568bn through the Cayman Islands.
The UK has come under pressure in recent years to bring its overseas territories and crown dependencies in line with international best practice on transparency. Campaigners have called for measures to ensure these jurisdictions aren’t used for tax dodging.
However, from April 2017, as reported, non-doms will lose some of their advantages and foreign nationals will no longer be able to enjoy tax breaks indefinitely in the UK. Those resident in the UK for 15 out of the previous 20 years will be liable for inheritance, capital gains and income tax on their worldwide assets.
A cross-party group of 88 MPs, led by the tax campaigner Margaret Hodge, is backing an amendment to the UK government’s Criminal Finances Bill that would force British territories to follow the UK in making public their company ownership registers by 2020.
‘No’ to public register
Unlike some tax havens, Bermuda does keep a central government record of who owns its offshore entities. This information is available to other governments on request, but not to the general public, a situation that, as reported, the Cayman Islands has also insisted that it will fight to protect.
“There is a thing in this world called privacy and at least in my island privacy still exists,” added Richards. “There is no public right to know anybody’s private business.”
Bermuda has just been named chair of the United Kingdom Overseas Territories Association and is leading the push against Hodge’s proposed amendment. Richards told The Guardian there was no obligation for Bermuda to lift the veil of secrecy when the US states of Delaware, Wyoming and Nevada continued to keep ownership information from the public.
As the ActionAid report highlights, Bermuda is among the most prosperous of Britain’s 14 offshore territories, but Richards defends claiming that it has a “much more transparent, much cleaner system than the countries that promulgate these rules in the first place”.
“The popular notion that somehow there is something nefarious going on in a small island that is relatively successful is false,” he said.
The Bermudian premier, Michael Dunkley, joined Richards in London this week for a series of briefings with UK ministers, with Brexit top of the agenda. Richards told The Guardian that his government was in listening mode but, if pushed, it would not hesitate to protect its interests.
He said last year he “would not hesitate to go for independence” if his country were threatened by Brexit. Bermuda’s last push for independence was in a 1995 referendum.