LONDON (Reuters) – Pitching tougher rules on tax evasion to the G8 is a precarious undertaking for Prime Minister David Cameron. Britain’s own tax havens are world leaders.
Britain’s list of exotic Overseas Territories reads like an accountant’s dream menu for a cash-rich Russian oligarch with something to hide, while British lawyers lead the field as gatekeepers for elaborate global mazes of offshore trusts.
Global tax evasion could be costing more than $3 trillion (1.90 trillion pounds) a year according to researchers from Tax Justice Network while as much as $32 trillion – twice the size of U.S. gross domestic product – could be hidden by individuals in tax havens.
“British tax havens are world leaders in providing a particular type of secrecy,” said John Christensen, an economist who directs the Tax Justice Network and who began investigating offshore havens in 1978.
From the families of Asian government officials to the new rich of the former Soviet Union, court cases and data leaks have shown many wealthy individuals favour Britain’s modern day treasure islands as the place to park their millions.
Tax authorities scouring a huge batch of 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.
Once buccaneer havens, many of the sleepy former British colonies now live off a blend of beach tourism and exotic finance that activists say leaves both locals and distant taxpayers short-changed.