Sealand steps up tax fight

The US entrepreneurs who have converted the concrete fortress off the Suffolk coast into a confidential tax-free location for web servers say Sealand does not come under UK jurisdiction because it is an independent state.

'An ongoing policy of non-taxation is a clear case of acknowledgement of independence by the UK government,' said Sean Hastings, HavenCo chief executive, referring to a letter addressed to Roy Bates, owner of Sealand.

An excerpt from the 1984 letter, from the Department of Health and Social Security, states: 'A ruling has now been given by our solicitors branch that you are not liable to pay contributions for periods when resident on Sealand'.

But a Revenue spokesman said: 'Sealand is under UK jurisdiction for tax purposes.' The government has said it does not recognise Sealand as an independent country.

'Prince' Bates, however, claims the Second World War fortress is sovereign and has cited several historic incidents in which the UK renounced jurisdiction.

Tax experts say that aside from raising all sorts of interesting possibilities, Sealand is eventually likely to come under the jurisdiction of one country or another for regulatory and tax reasons.

Anguilla-listed HavenCo has set itself up as a location for companies seeking to avoid controversial e-commerce laws such as the Regulation of Investigatory Powers Bill.

Sealand, which is less than eight miles off Felixstowe, is to be up-and-running by 1 September 2000 following the completion of its satellite connection.

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HavenCo.com