Tax investigators to probe UK authorities over UK’s Overseas Territories

A delegation of tax avoidance investigators from the European Parliament will descend on London this Thursday and Friday to probe HMRC, the National Crime Agency (NCA) and the Financial Conduct Authority (FCA) on the role played by British Overseas Territories and other ex-colonial territories in facilitating tax dodging.  

The delegation of MEPs from the Panama Papers Committee of Inquiry are investigating revelations contained in the offshore leaks, which include the Panama Papers and the Bahamas Leaks.  The leak of 11.5 million files from the database of Mossack Fonseca, the world’s fourth largest offshore law firm, highlighted the key role played by the UK and its Overseas Territories in the Caribbean and Bermuda in the offshore financial sector.

The revelations implicated senior Conservative politicians and their families, including the Home Secretary, Amber Rudd , who was previously director of two asset-management companies based in the Bahamas, and David Cameron’s father who had a network of offshore investment funds. Molly is a member of the delegation visiting London this week. She said:

“British overseas territories and other ex-colonial territories were at the heart of the Panama papers and with senior Conservative politicians implicated it is paramount that Britain’s tax arrangements continue to be properly scrutinized.

“This visit to London to quiz representatives from some of the key authorities concerned with tax avoidance takes place at a key juncture in the UK’s political history. We must do everything we can to tear down the walls of secrecy and encourage a spirit of openness.”

The visit by the pan-European delegation takes place at a time when Theresa May and chancellor Philip Hammond have both indicated that the UK could usher in a so-called ‘new economic model’ based on low taxes if the European Union do not agree a favourable Brexit deal with the UK. Molly said:

“As the EU explores ways to clamp down on tax dodging, Theresa May has set her sights on a low tax economy. This will only strengthen the arm of those in the UK and the Overseas territories who help wealthy elites and corporations dodge paying their fair share of tax; money we all need to help create a fairer and more equal society.”

Molly has recently launched a petition on the government’s petition site calling for a halt in the race to the bottom on corporation tax. The petition calls on the UK government to work cooperatively with EU partners on harmonising corporate tax rates across Europe and ensuring the main rate of UK corporation tax rate is returned to a minimum of 28%. She said:

“The government has no mandate to turn the UK into a tax haven post Brexit. Rather than threatening to race to the bottom on corporate tax rates, the government should instead be seeking to work cooperatively with our European partners to create a level playing field on tax.”  

Molly has also renewed a call for increased funding for HMRC, one of the organisations the delegation will visit on Friday. She said:

“The cuts to HMRC staff in recent years shows a government going soft on tax avoidance and evasion. If the government were serious about maximizing tax revenue they would realise that cutting HMRC staff is a false economy. Any savings from these cuts will be massively offset by reductions in tax revenues. If the government is serious about tackling tax avoidance it will reverse cuts to HMRC staff.”