You can run, but you can't hide. But you knew that already, right? Right? (This thing even on anymore?) Cheers, RAH ------- <http://www.guardian.co.uk/business/2009/oct/28/tax-more-tax-havens-told/prin...
The Guardian New threat for UK's offshore havens: tax Nick Mathiason guardian.co.uk, Wednesday 28 October 2009 21.59 GMT A Treasury report will ask overseas territories and crown dependencies to raise taxes. Photograph: Cate Gillon/Getty Britain's tax havens will be read the last rites tomorrow when a Treasury commissioned report will tell them to raise new taxes if they are to survive the economic crisis. Amid fears that Britain may have to bail out tax havens which are showing signs of financial stress, the government will publish the findings of an economic healthcheck of its overseas territories and crown dependencies including Jersey, the Isle of Man and the Cayman islands. Having spent the last 20 years luring the world's super-rich and top companies to their shores, Britain's offshore centres will be told they have no excuse not to diversify their tax bases to ward off financial crisis. Sir Michael Foot, a former Bank of England official and Bahamas bank inspector, will demand that island paradises must take greater responsibility for their economic futures. He is likely to emphasise that offshore jurisdictions will have no one to blame but themselves if they get into financial difficulties. Foot is also expected to say they have no excuse not to abide by anti-money laundering and counter- terrorism finance benchmarks. It is understood the government has particular concerns over the ability of Anguilla and Montserrat to ride out the economic storm. The Caribbean islands have been affected by the decline in financial services and US tourism. In the event of further economic deterioration, certain Caribbean islands could become failed states and be dragged into the illegal drugs trade, Whitehall insiders have said recently. Jersey, Guernsey and the Isle of Man are all UK crown dependencies. Britain's 14 overseas territories include Bermuda, the Caymans, Gibraltar and the British Virgin islands. It is thought Foot believes the crown dependencies have taken significant steps to abide by international regulations. But there is concern that moves to reduce all three islands' corporation tax to zero may breach European tax protocols. Earlier this month the Treasury slashed the Isle of Man's budget by #140m after it discovered a 400-year revenue sharing agreement was weighted sharply in the tax haven's favour. The cut was equivalent to a 24% budget reduction. The 80,000-strong island faces steep spending cuts and possible higher taxes. Similarly, the Caymans have also faced a financial crisis after a public spending programme and reduced fees from banks meant it was forced to beg the Foreign Office for permission to raise a #280m bank loan. Chris Bryant, the Foreign Office minister, refused until the islands' leaders convinced him they had a financial plan. For tax havens that spent tens of millions in attracting international business, the fall from grace has been swift as the opaque nature of their finances has led to world leaders blaming them for helping to destabilise the financial system.