DAVID CAMERON continues to be the subject of extreme criticism regarding the Panama Leaks, after it was discovered that the prime minister went out of his way to protect offshore trusts from EU tax avoidance measures.
This revelation comes just days after one of the biggest data leaks in history, which revealed that the PM’s late father, Ian Cameron, was a client of Panamanian offshore law firm Mossack Fonseca and allegedly used the corporate service provider to protect his investment fund Blairmore Holdings from UK taxes.
Europe must recognise ‘differences between companies and trusts’
An apparent supporter of tax transparency, in 2013 Cameron wrote to Herman Van Rompuy, European council president at the time, arguing that offshore trusts should be exempt from an EU clampdown on money laundering, creating a loophole that could be exploited by tax evaders.
In the letter, which was brought to light by the Financial Times, Mr Cameron said: “It is clearly important we recognise the important differences between companies and trusts. This means that the solution for addressing the potential misuse of companies, such as central public registries, may well not be appropriate generally.”
Cameron also urged the former president to continue supporting efforts by the OECD as it looked to agree a new single global standard on automatic tax information exchange.
The letter is available to view on the government’s website.
In 2013 the prime minister urged British overseas territories to work with him to “get their house in order” – a plea that in June 2013 led to the UK’s overseas territories and Crown dependencies agreeing to a clampdown on tax evasion.
On 6 April a government spokesperson addressed the letter, stating: “In the subsequent negotiations, we were able to secure a sensible way forward which ensures that trusts which generate tax consequences have to report their ownership to HMRC.”
The spokesperson added that “there are no offshore funds/trusts which the prime minister, Mrs Cameron or their children will benefit from in future”.
HMRC has also come under scrutiny regarding the Panama papers, with tax experts believing that the department will struggle to secure any criminal convictions following the leak.
In the midst of the controversy, Cameron visited Exeter University to speak about the EU referendum, but was quizzed by students over what EU states are doing to combat tax avoidance, something he claimed Cameron had “personal experience of”.
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
APNs are issued to individuals and businesses who are suspected of having engaged in tax avoidance, and require full payment of the disputed tax within 90 days
Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal