Jersey Hits Back At Labour's Tax Haven Slur

By ExpatBriefing.com Editorial 19 January, 2012

Jersey has responded to comments made by Ed Milliband, the leader of the opposition Labour Party party in the United Kingdom, urging that action should be taken by the European Union against British Crown Dependencies, including Jersey.

Geoff Cook, the head of Jersey Finance, the promotional agency for the island's financial services industry, rebuffed accusations from the Labour Party that the Crown Dependencies, which also include Guernsey and the Isle of Man, are not cooperating fully with the UK in the area of tax.

Labour has also called for the UK government to begin negotiations with the Crown Dependencies to relax confidentiality rules, and has suggested that the jurisdictions should be 'blacklisted' if they don't cooperate. It is thought that these policies will be included in the Labour Party's 2015 election manifesto as part of its deficit reduction strategy.

“It is disappointing when political leaders choose to make inaccurate accusations about Jersey which do not reflect the positive contribution that Jersey and the other Crown Dependencies make to the broader UK economy. Once again the confusion between the terms 'tax avoidance' and 'tax evasion' creates a false impression of Jersey’s co-operative, well-regulated offshore financial centre,” Cook stated.

“Tax evasion is illegal in Jersey and it is a criminal offence - not a civil one - to facilitate or engage in tax evasion. The majority of Jersey’s activities are focussed on the pooling of and structuring of international funds that have already been taxed,” he added.

Cook highlighted that the last Labour government commissioned the Foot Review in December 2008. The report highlighted the value that Jersey provided to the UK during the banking crisis in the form of hundreds of billions of pounds of liquidity. That contribution continues to this day, Cook underscored.

Furthermore, the report concluded that the amount of tax avoided by UK corporates using British Crown Dependencies and Overseas Territories was "significantly lower than estimates produced by previous studies have suggested".

“Therefore, the Foot report and most recent analysis from the HMRC (September, 2011), both suggest that tax avoidance is considerably lower than the wildly inflated figures produced by self-appointed lobby groups such as the Tax Justice Network,” Cook remarked.

“The characterization of Jersey as a 'tax haven' fails to recognize the regular endorsements that the island has received from the OECD and IMF," Cook added. "Moreover the accusation made today that Jersey is not co-operative with the HMRC is quite simply wrong: Jersey has signed both a Tax Information Exchange Agreement and a Double Taxation Agreement with the United Kingdom. Jersey has very clear, open and transparent lines of communication with HMRC and is fully co-operative on tax matters. We also work alongside the UK in fighting financial crime and tax evasion.”

To provide Milliband's party with greater insight into Jersey's financial centre and its policies, Ian Gorst, Jersey's Chief Minister has extended an invitation to the Labour leader to make an official visit to the island to view first hand that the territory operates as a stable, reliable and responsible international financial centre.

A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.asp

Tags: Expatriates | Isle Of Man | Tax | Offshore Confidentiality | Tax Avoidance | Banking | International Financial Centres (IFC) | Guernsey | Jersey | United Kingdom | Offshore | Offshore Banking | Banking Secrecy | Services |

 





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