From BBC

The government should consider imposing “direct rule” on British overseas territories and dependencies if they do not comply with UK tax law, Labour Party leader Jeremy Corbyn has said.
A huge data leak from Panama-based Mossack Fonseca showed the law firm registered more than 100,000 secret firms to the British Virgin Islands.
Mr Corbyn said their governments must understand the “anger” of Britons.
Downing Street said the UK was “ahead of the pack” on tax transparency.
Q&A: All you need to know about the leaked documents
Panama Papers reaction – latest
Labour urges probe into Britons including PM’s family
Eleven million leaked documents showed how Mossack Fonseca clients were able to launder money, dodge sanctions and avoid tax – the law firm says it has operated beyond reproach for 40 years.
There are links to 12 current or former heads of state in the data, including dictators accused of looting their own countries.
Reaction around the world includes:
Crowds gathering outside Iceland’s parliament demanding Prime Minister Sigmundur Gunnlaugsson step down over allegations he concealed investments in an offshore company
Close relatives of seven current or former Chinese leaders have been found to have links to offshore firms
The Australian Tax Office (ATO) is investigating more than 800 individual taxpayers, all residents of Australia
The US Department of Justice is reviewing the leaked documents to look for evidence of corruption that could be prosecuted in the US, the Wall Street Journal reports
France and Spain are investigating money laundering exposed by the leaks among their resident taxpayers
Panama President Juan Carlos Varela has said his government has “zero tolerance” for illicit financial activities and would co-operate vigorously with any judicial investigation in any country
Leaked files also mention UK Prime Minister David Cameron’s late father, Ian, who used one of the most secretive tools of the offshore trade after he helped set up a fund for investors.
Downing Street sources told the BBC Mr Cameron did not have any shares in Blairmore Holdings, the Panama-based company Ian Cameron helped set up in 1982.
The sources are not saying that other members of the Cameron family do not own shares in the offshore firm, however.
‘Honey pots of corruption’
A number of British overseas territories and Crown dependencies are named in the files raising the question of what the UK can do about them.
These are self-governing territories which rely on the UK for international relations and defence, but their autonomy can be removed, as in the case of the Turks and Caicos Islands.
The UK government imposed direct rule on the Caribbean islands for three years after evidence was found of widespread corruption among the ruling elite.
It was only after the Turks and Caicos government implemented rules around sharing tax information that home rule was restored in 2012.
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Media captionLabour Party leader Jeremy Corbyn: “This is money that’s taken from our health service, our local services”
Mr Corbyn said the territories, including the Cayman Islands and the British Virgin Islands, were encouraging tax avoidance on “an industrial scale”, to the detriment of public services in the UK.
He has called for an independent investigation into the tax affairs of all Britons linked to the Panama papers, including Mr Cameron’s family.
Asked if direct rule was the solution, Mr Corbyn said: “If the local government is simply going to condone this level of… tax avoidance and tax evasion of money that has been made in Britain… then that’s something that has to be considered.
“They’re not independent territories. They are self-governing, yes, but they’re British Crown dependent territories. Therefore surely there has to be an observance of UK tax law in those places,” he told the BBC.
“If they’ve become a place for systemic evasion and short-changing of the public in this country then something has to be done about it. Either those governments comply or a next step has to be taken.”
He said if the government decided to impose direct rule, it could be done “almost immediately”.
Former Business Secretary Vince Cable, a Liberal Democrat, said: “We can’t send gunboats these days but we can take the small territories under direct rule.”
Tax havens: What are they and why do they matter?
Two broad qualifications for being a tax haven are to have a low or zero rate of income tax and guarantee the rich a cloak of secrecy they would not receive in their own country.
They matter because of lost revenue – it is estimated that UK tax authorities could be losing up to £7.2bn a year from avoidance and evasion.
They have also been used to cover up criminal activity.
Dominic Grieve, former Conservative attorney general, said removing self governance in overseas territories was a “bit of a nuclear option” and the consequences on the people and their economy needed careful consideration.
If havens in overseas territories were shut down, people would go elsewhere where there might be far fewer regulations which would encourage the money laundering and criminality we want to suppress, he told BBC Radio 4’s Today programme.
Geoffrey Robertson, barristerImage copyrightAFP
Image caption
Barrister Geoffrey Robertson says Britain is at the heart of international tax avoidance
Geoffrey Robertson QC, an international human rights lawyer, said: “The British Empire has shrunk largely to a number of tax havens – treasure islands, as they are known.
“Britain is at the heart – the hub – of international tax avoidance by allowing these little remnants of empire to have tax secrecy laws and enable offshore trusts and offshore companies to operate without transparency.”
He said change could come with “some form of international convention” to require transparency, lawyers reconsidering their ethics and an international enforcement body able to inquire, inspect and punish.
‘Dishonest minority’
Since 2009, many attempts have been made to crack down on abuses. More than 700 tax transparency deals have been signed globally.
Places including Switzerland, the Channel Islands and Luxembourg have tightened the rules, but Panama and the British Virgin Islands are among those criticised for not doing enough.
Next month, Mr Cameron will chair an international summit in London on tax avoidance and evasion, where the use of offshore tax havens to escape scrutiny will be high on the agenda.
Downing Street said three things had been asked of the British overseas territories and Crown dependencies – the automatic exchange of tax information; a common reporting standard for multinational companies and central registries so people know who really owns companies.
Rock of Gibraltar with Spain in background.Image copyrightAFP
Image caption
Gibraltar is a British overseas territory, as are the British Virgin Islands and Cayman Islands
“They have all delivered on the first two so now they must deliver on central registries,” a spokeswoman said.
“Gibraltar, Bermuda and Jersey have already done so. We are close to agreement with Guernsey and Isle of Man. Now we have to get the Cayman Islands and British Virgin Islands over the line and we are determined to work with them to do so by the time of the summit in May.”
In 2013, Mr Cameron was quoted as saying: “I do not think it is fair any longer to refer to any of the overseas territories or Crown dependencies as tax havens – they have taken action to make sure that they have fair and open tax systems.”
HM Revenue and Customs said it has brought in more than £2bn from offshore tax evaders since 2010 and introduced new criminal offences and higher penalties.
In a statement, it said: “There are no safe havens for tax evaders and no-one should be in any doubt that the days of hiding money offshore are gone.
“The dishonest minority, who can most afford it, must pay their legal share of tax, like the honest majority already does.”
IMAGES:
David Cameron Image copyright Getty Images

For more on this story go to: http://www.bbc.com/news/uk-35965855

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Panama Papers: Labour urges probe into Britons including PM’s family

From BBC

Labour is calling for an independent investigation into all Britons linked to tax haven allegations – including David Cameron’s family.
Downing Street has said Mr Cameron has no shares in an offshore investment fund set up by his late father.
Leaked Panamanian documents show Ian Cameron was a director of a firm which held its meetings in the Bahamas to shield it from UK tax.
It’s not known if the PM’s family has kept a financial interest in the fund.
Labour leader Jeremy Corbyn has said he will publish his own tax returns – and has called on Mr Cameron to “set the record straight” by publishing his.
‘Pay their way’
He said: “I think the prime minister, in his own interest, should tell us exactly what’s been going on.
“It’s a private matter in so far as it’s a privately held interest, but it’s not a private matter if tax has not been paid.
“So an investigation must take place, an independent investigation.”
Asked whether the PM should resign if he is found to have benefited, Mr Corbyn said: “Let’s take one thing at a time. We need openness, we need an examination, we need a decision after that.”
He also said the government should consider imposing “direct rule” on British overseas territories and dependencies if they do not comply with UK tax law.
In a speech in Harlow, where he was launching Labour’s local election campaign, he said an inquiry was needed to quickly get to the bottom of how much private wealth was being “siphoned off” overseas, claiming the British taxpayer is being short-changed.
He said the super-wealthy were being allowed to “dodge taxes and flout the rules” and ministers must do more than pay “lip service” to ensure that the “richest pay their way”.
‘Private matter’
In recent years, Mr Cameron has led calls for action on global tax avoidance and transparency over ownership structures.
Downing Street has sought to brush aside controversy over his late father’s tax affairs prompted by the leak of documents from Panamanian law firm and offshore specialists Mossack Fonseca, saying it was “a private matter” and “an old story”.
No 10 said the government “has raised billions of pounds by taking robust action to crack down on tax avoidance in Britain and the prime minister has spearheaded international action to improve tax transparency around the globe”.
The Panama documents reveal Ian Cameron was a client of Panamanian law firm Mossack Fonseca and used one of the most secretive – albeit lawful – tools of the offshore trade after he helped set up a fund for investors.
When the late businessman wanted to attend a board meeting of Blairmore Holdings, he had to fly to either the Bahamas or Switzerland.
Blairmore, which appears to have been named after the Cameron family’s ancestral estate in Aberdeenshire, held its meetings offshore to ensure the investment fund wouldn’t have to pay any UK income tax or corporation tax on its profits.
If the meetings had been held in London, then it may have been considered resident in the UK and taxed as a UK company.
‘Questions to answer’
The leaked documents show that Ian Cameron, who died in 2010, was one of five UK directors of Blairmore Holdings who flew to board meetings overseas. There were also three directors in Switzerland and three in the Bahamas.
The leaked documents also reveal how the company used bearer shares, ensuring the true owners – the wealthy investors in Blairmore Holdings – were hidden from view.
Blairmore company documents record how two employees of a bank in the Bahamas were holders of “2,347,280 shares in bearer form” in 2005. This made them the official owners of all Blairmore’s investments.
Blairmore stopped using bearer shares in 2006. It was David Cameron’s government that banned bearer shares in the UK in 2015.
Downing Street has insisted the UK has been “ahead of the pack” in pushing for tax havens to become more transparent, helping secure 40 changes to international tax law to close loopholes.
But the Guardian has reported that a number of Conservative donors, supporters and former MPs are linked to tax havens around the world. A number of them have firmly denied any impropriety.
Eleven million leaked documents showed how Mossack Fonseca clients were able to launder money, dodge sanctions and avoid tax – the law firm says it has operated beyond reproach for 40 years.
There are links to 12 current or former heads of state in the data, including dictators accused of looting their own countries.
Reaction around the world includes:
Crowds gathering outside Iceland’s parliament demanding Prime Minister Sigmundur Gunnlaugsson step down over allegations he concealed investments in an offshore company
Close relatives of seven current or former Chinese leaders have been found to have links to offshore firms
The Australian Tax Office (ATO) is investigating more than 800 individual taxpayers, all residents of Australia
The US Department of Justice is reviewing the leaked documents to look for evidence of corruption that could be prosecuted in the US, the Wall Street Journal reports
France and Spain are investigating money laundering exposed by the leaks among their resident taxpayers
Panama President Juan Carlos Varela has said his government has “zero tolerance” for illicit financial activities and would co-operate vigorously with any judicial investigation in any country

IMAGES:
Ian Cameron with his wife Mary 2010Image copyright Getty Images Ian Cameron was a director of Blairmore Holdings
Labour Party leader Jeremy Corbyn: “This is money that’s taken from our health service, our local services”

For more on this story and video go to: http://www.bbc.com/news/uk-politics-35967201

See also iNews Cayman related stories published April 4 2016 under “Panama Papers: remarkable global media operation holds rich and powerful to account” at: http://www.ieyenews.com/wordpress/panama-papers-remarkable-global-media-operation-holds-rich-and-powerful-to-account/