Cameron pledges to “sweep away” UK tax secrecy

UK Prime Minister David Cameron has pledged to "sweep away" tax secrecy in the UK by forcing companies to declare who made money out of them and would push for the G8 nations clamping down on tax avoidance.

Cameron said he would appeal to G8 leaders to take steps to prevent tax avoidance by companies.

The prime minister said he would also introduce a new central register requiring that true owners of shadowy "shell" companies be declared to the tax authorities.

In an interview with The Guardian, he said he was determined to end the "secretive companies in secretive locations" which cost billions of pounds in lost tax revenues.

He would also tell leaders from the overseas territories of the UK and Crown dependencies that they needed to do more clampdowns on tax evasion and aggressive tax avoidance.
 
This comes following a series controversies over the tax bills paid by multinational companies, including Google and Starbucks.

MPs on the Public Accounts Committee last week recommended that HM Revenue and Customs investigate Google's tax affairs after it paid just £10 million in tax despite generating £11.5 billion in revenue from the UK.

According to Cameron, the UK needed to "get its own house in order" if he was to persuade the G8 leaders to sign up to developing a worldwide set of standards on the exchange of information between tax authorities.

Commentators point out that the UK's own tax havens were world leaders, with its overseas territories leading the list and British lawyers and accountants serving as enablers of dubious corporate tax practices.

Researchers from Tax Justice Network point out that global tax evasion could be costing in excess of $3 trillion a year while as much as $32 trillion - twice the size of US gross domestic product - could have been secreted by individuals in tax havens.

According to John Christensen, an economist who directs the Tax Justice Network and who started investigating offshore havens in 1978, British tax havens were world leaders in providing a particular type of secrecy.

From the families of Asian government officials to the new rich of the former Soviet Union, court cases and data leaks had shown the UK's treasure islands were the top choice of wealthy individuals seeking to park their funds in foreign locales.
 
Tax authorities that tracked leads from leaked data said last month that the British Virgin Islands and the Cayman Islands were among those housing shell companies and trusts to hide wealth.