Yet another data leak has recently exposed the identities of thousands of people with funds in the British Virgin Islands (“BVI”) and the sheer volume of information that has been released is astounding. The leak, we are told, was more than 160 times larger than the US State Department cables published by WikiLeaks in 2010 and contained years of financial information about BVI private incorporation agencies and their offshoots in Singapore, Hong Kong and the Cook Islands. There is, of course, nothing inherently wrong in keeping your money in any of these rather exotic locations, but one suspects that the principal attraction lies in their discretion. Whilst a desire for privacy is entirely understandable, it is the desire for secrecy that is being questioned in the current climate and it’s not just tax authorities that are getting hot under the collar. A British property developer was recently jailed for contempt for concealing assets in divorce proceedings, after apparently using a complex network of offshore companies to hide assets from his ex-wife.
As all this is going on, the UK has been busy negotiating agreements with the Isle of Man, Jersey and Guernsey to allow taxpayers with undisclosed assets there to come forward and make a clean breast of things to HM Revenue & Customs. These follow on from the well-established disclosure facility with Liechtenstein and the more recent agreement with Switzerland. However, some are questioning how the government can be doing all this on the one hand while on the other allowing jurisdictions like the BVI to continue as they do. Lord Oakeshott, the Liberal Democrat peer and a former Treasury spokesman, said: “How can David Cameron keep a straight face calling for the G8 to make big business pay tax when we let the BVI use British law and British protection to suck in billions in dirty money?” A fair point, well made, and I think this story has further to run as the information in the leak is disseminated to a wider audience in the coming months.
We await developments with interest!
Carl Barwick – Tax Manager
Westbury Accountants and Business Advisors is an accountancy practice based in London. Westbury have been providing Accounting and Tax solutions to small and medium sized businesses since 1936. Talk to the team at Westbury on 0207 253 7272 or visit http://www.westbury.co.uk.