Panama Files Henry Replies

Firstly, there is a massive and fundamental difference between tax avoidance (which is perfectly legal and often uses schemes approved by HMRC) as opposed to tax evasion which it completely illegal. This is why it is obviously important that HMRC secures urgent access to the Panama Files so as to track down any UK citizens who have been acting in this way. The second key point is that the emergence of these files does reinforce the need for strong action against both corporate and individual tax evasion. As I am sure you are aware, both this Government and the Coalition Government of 2010/15 have brought in 40 different measures to tighten up the tax regime in respect of off shore companies and so called ‘non doms’, e.g. Non-doms now have to pay CGT on the sale of homes in London and elsewhere; those that buy through off shore companies now have to pay full stamp duty; and we are currently bringing in measures to ensure that all UK companies have to disclose their full beneficial ownership. In the last Parliament, HMRC secured £100 billion in additional tax revenue as a result of action taken. I am pleased that the recent Budget goes further, introducing a comprehensive package of measures, which will raise £12 billion in total. Finally, some people have asked me about the British Crown Dependencies (Jersey, Isle of Man, etc) and the British Overseas Territories (BVI, Bermuda, Cayman Islands etc). Although part of Britain, these territories are all self-governing, and all pride themselves on running efficient and competent administrations. The BVI (British Virgin Islands) have built their economy round a world class system of corporate registration. However, in order to comply with numerous international treaties on transparency and information sharing a significant number of changes have taken place. When I was the FCO Minister for the OTs I visited all the Territories including BVI and saw for myself many of these changes. In his statement yesterday the Prime Minister said; “As the revelations in the Panama papers have made clear, we need to go even further. So we are taking three additional measures, to make it harder for people to hide the proceeds of corruption offshore, to make sure that those who smooth the way can no longer get away with it and to investigate wrongdoing.” The 3 measures are as follows: 1. Our Crown Dependencies and Overseas Territories that function as financial centres will now provide UK law enforcement and tax agencies with full access to information on the beneficial ownership of companies. As well as this, from September they will exchange taxpayer financial account information automatically. 2. We will legislate this year for a new criminal offence to apply to corporations that fail to prevent their representatives from criminally facilitating tax evasion. 3. Provide new funding of up to £10 million for a new cross-agency taskforce to swiftly analyse all the information that has been made available from Panama, and take rapid action. I do believe the absolute key point relates to the need to ensure that British tax authorities, the Police and Intelligence Services are able to work alongside the Governments of these Territories and Dependencies. By doing so Britain will be able to play a significant part in bringing down organised crime.