In response to Britain’s attempt to put a stop to offshore financial secrecy, Bermuda’s government has accused the UK of being a “tax haven” too. Bob Richards, deputy premier and finance minister of Bermuda said this ahead of a meeting between Theresa May and leaders of Britain’s overseas territories.
Richards cited non-dom laws that allow foreign nationals to live in the UK without paying tax on overseas income as the reason behind his comments.
“You have more billionaires resident in London than any place on earth. They are not here for the weather, they are here for the tax climate. We have a double standard going on here.
“We have a much more transparent, much cleaner system than the countries that promulgate these rules in the first place. The popular notion that somehow there is something nefarious going on in a small island that is relatively successful is false,” he added.
However, the rules are changing for non-doms who will lose some of their benefits after April this year. Foreign nationals won’t be able to have tax breaks indefinitely. If they are resident in the UK for 15 out of 20 previous years, they will be liable for inheritance, income and capital gains tax on all their assets.
The UK’s Proposal
Proposed legislation would mean that public registers would have to name owners of offshore companies.
88 MPs are backing an amendment to the government’s criminal finances bill that would make British territories follow the same rules as the UK in making their company ownership registers public by 2020.
However, Richards says this will lead to an invasion of privacy. “There is a thing in this world called privacy and at least in my island privacy still exists. There is no public right to know anybody’s private business.”
Bermuda does keep a record of ownership, unlike many other territories. However, this is only available to other governments on request and is not available for the general public to see.
Richards said he would try to prevent the register being made public. “The register in Bermuda is there to protect the government’s reputation … It is not the public’s business. We are not here to tell you who is doing business in Bermuda.”
David Cameron first called for the register to be opened in 2013.
Of Britain’s 14 offshore territories, Bermuda is one of the most successful. It is also one of the world’s top three centres of the insurance industry, after New York and London.
Richards argued that publishing records would not be in the interests of Bermuda. Similarly, he said that if the country were threatened by Brexit effects, then there would likely be a push for independence again. The last referendum being in 1995.
Bermuda currently has a corporation tax rate of zero, making it a major centre for companies seeking tax avoidance.
Research from Oxfam found that US companies had reported $80bn (£64bn) in profits in Bermuda in 2012. This was more than the combined profits in countries like France, Germany, Japan and China.
What do you think of the UK’s proposals to combat tax avoidance? Should Bermuda release their records to the public? Let us know your thoughts in the comments section.