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All but a tiny minority of the biggest companies in the UK regularly indulge in corporate tax avoidance through the use of offshore financial shelters, according to research by a leading anti-poverty organisation.
Figures produced by ActionAid suggest that 98 multinationals listed in the FTSE 100 live a ‘secret life’ in which they invest in tax havens as a matter of routine – and such behaviour is having a ‘massive impact on rich and poor countries alike’. Developing nations currently lose three times more to tax havens than they receive in aid each year, said the international charity.
It went on to claim that the UK’s banks are the most enthusiastic tax-dodgers, with the four top high street names, HSBC, Barclays, Lloyds Group and RBS, notching up 1,649 offshore companies between them. They are by far the main users of the Cayman Islands, where Barclays alone has 174 arms.
However, the single biggest user of tax havens is the advertising giant WPP. It has 611 interests set up offshore – where a quarter of the 34,216 companies set up by FTSE 100 groups are located.
More than 600 are based in Jersey, and there are 400 in the Cayman Islands and 300 in Luxembourg. Only Fresnillo, the world’s largest primary silver producer, and financial services provider Hargreaves Landsdown do not make use of tax havens, according to ActionAid, which called on UK ministers to rethink their proposals to relax rules relating to use of offshore financial shelters.
The development charity’s tax justice spokesperson, Chris Jordan, said, ‘Tax havens might provide the lure of financial secrecy and low tax rates for big companies, but at a time when all countries are desperate for revenues, the government can’t afford to turn a blind eye.’
