London: The secret life of the UK’s biggest companies listed on the
London Stock Exchange has been uncovered today revealing that 98 out
of 100 are using tax havens. ActionAid’s research show for the first
time just how deeply embedded this practice is for nearly all of
Britain’s top multinationals.
Corporate tax avoidance, which is one of the main reasons companies
use tax havens, is having a massive impact on rich and poor countries
alike. Developing countries currently lose three times more to tax
havens than they receive in aid each year.
ActionAid’s research shows banks are doing a brisk business via tax
havens, despite the ongoing repercussions of a global financial crisis
they helped to create. The banking and financial sector are by far the
heaviest users with the ‘big four’ High Street names HSBC, Barclays,
Lloyds Group and RBS notching up 1,649 tax haven companies.
Chris Jordan, ActionAid’s tax justice expert said: “ActionAid’s
research showing the use of tax havens by Britain’s biggest companies
raises serious questions they need to answer.
“Tax havens have a damaging impact on the UK exchequer, the stability
of the international financial system, and vitally on the ability of
developing countries to raise tax revenues which would lift them out
of poverty and make them less dependent on aid.”
ActionAid’s key findings:
· 98 multinationals declared tax haven companies. The banking
sector makes heaviest use of tax havens, with a total of 1,649 tax
haven companies between the ‘big four’ banks. They are by far the
biggest users of the Cayman Islands, where Barclays alone has 174
companies.
· The biggest tax haven user overall is the advertising
company WPP, which has 611 tax haven companies.
· A quarter of the 34,216 companies set up by FTSE 100
multinationals are located in tax havens.
· There are over 600 FTSE 100 companies in Jersey (more than
in the whole of China), 400 in the Cayman Islands and 300 in
Luxembourg – all tiny tax havens.
· Only two little-known companies Fresnillo and Hargreaves
Landsdown, don’t use tax havens
The use of tax havens facilitates tax avoidance and evasion, which
undermines the revenue bases of both developing and developed
countries. Additional revenues are urgently needed both to invest in
the fight against poverty and to tackle the deficits incurred during
the financial crisis in rich countries.
Chris Jordan continued: “When multinationals use tax havens to avoid
paying their fair share, ordinary people in both poor and rich
countries are left to pick up the bill. Spending on doctors, nurses
and other essential services gets cut for those who need it most.
“Tax havens might provide the lure of financial secrecy and low tax
rates for big companies, but at a time when all countries are
desperate for revenues, the UK government can’t afford to turn a blind
eye.”
ActionAid is calling on the government to urgently rethink its current
proposals to relax UK anti tax haven rules. The Treasury itself
estimates these changes will result in an £840 million tax break for
multinational companies that use tax havens.
With both developing and developed countries bearing the brunt of
debilitating losses, ActionAid says the UK must ensure the G20 takes
the decisive action it promised on tax havens at the London summit in
2009.
1. ActionAid’s media brief : ‘Addicted to tax havens – the secret
life of the FTSE 100’ is here:
http://www.actionaid.org.uk/doc_lib/addicted_to_tax_havens.pdf
2. The ActionAid FTSE100 tax haven tracker is at
www.actionaid.org.ukl/taxhavens (link goes live on 11th October)
3. ActionAid’s research shows the number of subsidiaries, joint
ventures and associates declared by each FTSE100 group in a list of 52
tax havens. ActionAid is not accusing any of the companies mentioned
in this press release of tax avoidance, although we are saying that
they need to explain the reasons for their use of tax havens
4. ‘Calling Time: Why SABMiller should stop dodging taxes in
Africa’ is available at
http://www.actionaid.org.uk/102671/calling_time_the_research.html
5. World leaders at the April 2009 London G20 summit agreed to “to
take action against non-cooperative jurisdictions, including tax
havens. We stand ready to deploy sanctions to protect our public
finances and financial systems. The era of banking secrecy is over.”
The communiqué is available at
http://www.g20.org/Documents/g20_communique_020409.pdf