Darling on the offensive against UK ‘tax haven’ claims

In an exclusive interview with Accountancy Age the new chancellor
has said claims that the UK was a tax shelter were ‘seriously flawed’.

‘Firstly the IMF does not categorise the UK as a tax haven. This was
suggested by some organisations on the back of some seriously flawed
experimental methodology for identifying tax havens. The government is committed
to ensuring that everyone pays their fair share of tax,’ he said.

Darling’s robust defence of UK tax rules comes amid an onslaught against the
system from unions and tax campaigners, who have argued that the non-domiciled
rules and light company incorporation regime give the UK the classic
characteristics of a tax haven.

A recent working paper, commissioned by the IMF, but not necessarily a
reflection of its official view, argued that the UK should be classified in the
same category as offshore financial centres such as the Isle of Man and Jersey.

The consultation on the taxation of foreign profits, meanwhile, has seen some
advisers predict that the UK will become more attractive to international
companies than Luxembourg, prompting further outrage from critics.

‘The UK behaves like a tax haven in that it refuses to co-operate with other
regions on tax and does not take action on the tax haven jurisdictions that it
is responsible for,’ said tax activist Richard Murphy.

The UK’s controversial non-domiciled rules, which exempt foreigners from
paying tax on foreign income, have fuelled further claims of inequality and
unfairness in UK tax affairs.

Darling would not commit to reforming or scrapping the rules, saying that the
matter was ‘complex’ and would only be addressed when a Treasury review of the
regime was completed.

Peter Cussons, international tax partner at PricewaterhouseCoopers, voiced
his support for Darling: ‘I don’t think it is right to focus on one politically
sensitive issue and then conclude that the UK is a tax haven.’

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