Tuesday, June 26, 2012

Tax haven Jersey in the spotlight

 Paradis Fiscal: Jersey denies being a tax haven, but these French activists aren't taken in.

The Guardian has published two major articles on the British tax haven of Jersey.  The first article explores the island's role as primarily a centre for complex tax avoidance, something which the spokespeople of Jersey Finance are always anxious to deny, though experts with the island's finance sector are less cagey in private:

"Only in private will a small number of Channel Islands politicians and businessmen betray any trace of personal misgivings about the manner in which the local finance industry trades on complex tax structures to help big business and super-rich individuals cut their tax bills.
"When a horse falls from heaven you don't check its teeth, do you?" said one government figure, who asked not to be named. "And the finance industry is like that here."
Another lawyer who works in Jersey's trust industry, looking after assets of overseas millionaires, explains over a beer that local rules mean he must know the commercial rationale for the structures he administers. "The answer is generally always tax. Tax and inheritance planning." He too spoke only in confidence."

You can read the entire article here.

The second article concerns political reactions in Jersey to the mounting international pressure to close down tax havens.  Disappointed at the lack of support from the Tory-led British government (the Tories have long supported tax havenry, but are more concerned now about protecting the City of London than protecting the VAT scams of the fulfillment industry), senior politicians in Jersey are now openly calling for independence from the UK.  Read more here.


Blogger James said...

Let's correct a misconception: there is currently precisely one Jersey politician who is prepared to talk seriously and openly about independence.

It's a fantasy, of course. The fact is that we have grossly dysfunctional government, a legal system that is based on 10th century Norman law, inadequate division of executive, legislative and judicial powers, biased media... and that's before you start talking about open corruption over cases like the child abuse that took place at Haut de la Garenne.

But I do have a problem with The Guardian's reporting thus far. It has focussed on talking to a limited community of financial and political figures. So far as I can see they have spoken to not one person working in tourism, or services, or retail, or farming.

I am prepared to bet that none of them would want an independent Jersey. The cost of being outside the EU and the British common travel area would kill their businesses. Whether anyone is prepared to listen to them is another matter.

11:19 pm  

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