The Treasurer of the Conservative Party has called on the UK government to compete with the Cayman Islands and other tax havens by ‘easing the tax burden on wealthy foreigners who invest in hedge funds’, The Guardian reported today as it published data indicating that 68 of the UK’s MPs and peers are directors of companies linked to offshore jurisdictions.
Lord Fink, the former CEO of Man Group who has been described as ‘the godfather of UK hedge funds’, is a major donor to the Conservatives. ‘I don't see why the UK should not compete for jobs that at present are going to the Cayman Islands,’ he said in an interview with the newspaper.
Fink was quoted as saying that offshore companies were used for technical reasons, not tax avoidance by the company. ‘Many of the structures in the [hedge fund] business have to be based offshore anyway. Otherwise why would a Japanese person investing in a hedge fund want to pay UK tax? All of the industries I am involved in have to have some offshore entities, if only to help those investors.’
Fink said he tried three and a half years ago to persuade George Osborne – then Shadow Chancellor – that UK taxation of hedge funds should be changed to allow the British mainland to compete with offshore jurisdictions. ‘I have long felt that the British government loses jobs to tax havens by allowing [HMRC] to have these rather archaic rules, he told The Guardian.
At the time he lobbied Osborne, Fink was not the Treasurer but had given more than £1m to the party, the paper reported. Osborne resisted his arguments.
The Tax Justice Network claimed today that HMRC already allowed ‘extraordinary tax privileges’ to hedge funds located in London, but ‘Fink wants to embed these privileges further’.
‘We have news for Lord Fink: the UK is already a tax haven, has been for decades, and sits at the core of a web of tax havens spread across the world which probably constitutes the largest integrated tax haven in the world, including as it does, long established secrecy jurisdictions in Cayman, the British Channel Islands, Gibraltar, Turks and Caicos, Bermuda, etc, etc, etc,’ the TJN said.
In a detailed statement published in The Guardian’s Datablog, Lord Fink said he paid ‘full’ income tax and capital gains tax in the UK: ‘If you want to be a successful business and attract invisible earnings to the UK, you have to be based offshore … Whereas technically I am a shareholder in overseas companies any benefits I get from them are subject to full tax. I’ve paid a fortune in income tax.’
The paper reported that its investigation revealed that ‘68 MPs and peers, who can influence Britain's tax laws, are either directors or non-executive directors of firms linked to tax havens’. The findings showed ‘how widespread the use of offshore jurisdictions has become in British business life – even by companies which have lawmakers and major public figures on their boards’.
Politicians and companies had claimed that ‘many of the offshore firms are established in these jurisdictions for operational business functions or administrative reasons rather than to secure a lower tax liability’.
The Guardian acknowledged that there was no universally accepted definition of ‘tax haven’ and said it had used a list of 34 jurisdictions, identified for ‘secrecy and low tax’, compiled for the US Congress in 2009. It also recognised that ‘being based in a tax haven does not always mean a company is avoiding tax or hiding company information – even though the jurisdictions are closely associated with this’. But it included in its research every offshore company, regardless of whether it was running a business in the jurisdiction.
The Treasurer of the Conservative Party has called on the UK government to compete with the Cayman Islands and other tax havens by ‘easing the tax burden on wealthy foreigners who invest in hedge funds’, The Guardian reported today as it published data indicating that 68 of the UK’s MPs and peers are directors of companies linked to offshore jurisdictions.
Lord Fink, the former CEO of Man Group who has been described as ‘the godfather of UK hedge funds’, is a major donor to the Conservatives. ‘I don't see why the UK should not compete for jobs that at present are going to the Cayman Islands,’ he said in an interview with the newspaper.
Fink was quoted as saying that offshore companies were used for technical reasons, not tax avoidance by the company. ‘Many of the structures in the [hedge fund] business have to be based offshore anyway. Otherwise why would a Japanese person investing in a hedge fund want to pay UK tax? All of the industries I am involved in have to have some offshore entities, if only to help those investors.’
Fink said he tried three and a half years ago to persuade George Osborne – then Shadow Chancellor – that UK taxation of hedge funds should be changed to allow the British mainland to compete with offshore jurisdictions. ‘I have long felt that the British government loses jobs to tax havens by allowing [HMRC] to have these rather archaic rules, he told The Guardian.
At the time he lobbied Osborne, Fink was not the Treasurer but had given more than £1m to the party, the paper reported. Osborne resisted his arguments.
The Tax Justice Network claimed today that HMRC already allowed ‘extraordinary tax privileges’ to hedge funds located in London, but ‘Fink wants to embed these privileges further’.
‘We have news for Lord Fink: the UK is already a tax haven, has been for decades, and sits at the core of a web of tax havens spread across the world which probably constitutes the largest integrated tax haven in the world, including as it does, long established secrecy jurisdictions in Cayman, the British Channel Islands, Gibraltar, Turks and Caicos, Bermuda, etc, etc, etc,’ the TJN said.
In a detailed statement published in The Guardian’s Datablog, Lord Fink said he paid ‘full’ income tax and capital gains tax in the UK: ‘If you want to be a successful business and attract invisible earnings to the UK, you have to be based offshore … Whereas technically I am a shareholder in overseas companies any benefits I get from them are subject to full tax. I’ve paid a fortune in income tax.’
The paper reported that its investigation revealed that ‘68 MPs and peers, who can influence Britain's tax laws, are either directors or non-executive directors of firms linked to tax havens’. The findings showed ‘how widespread the use of offshore jurisdictions has become in British business life – even by companies which have lawmakers and major public figures on their boards’.
Politicians and companies had claimed that ‘many of the offshore firms are established in these jurisdictions for operational business functions or administrative reasons rather than to secure a lower tax liability’.
The Guardian acknowledged that there was no universally accepted definition of ‘tax haven’ and said it had used a list of 34 jurisdictions, identified for ‘secrecy and low tax’, compiled for the US Congress in 2009. It also recognised that ‘being based in a tax haven does not always mean a company is avoiding tax or hiding company information – even though the jurisdictions are closely associated with this’. But it included in its research every offshore company, regardless of whether it was running a business in the jurisdiction.
