The announcement by Cameron that he intends to implement tighter tax controls though agreements with UK overseas territories and Crown dependencies is going to have little to no effect on the collection of tax by HMRC.
The territories signed to the agreement are Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Anguilla, Monserrat, the Turks and Caicos Islands, Jersey, Guernsey, and the Isle of Man.
Large companies and corporations which have been the subject of recent reports on non-payment of UK tax (such as Google and Amazon) are not located in any of those territories. The companies that are based in those territories and could become subject to UK tax have the resources to simply move all of their financial dealing elsewhere, or have departments dedicated to making sure they do not pay excessive amounts of tax.
The majority of those who will be affected are ex-pats who have salary payments paid into an offshore account in those territories – hardly the source of significant revenue for HMRC claimed by Cameron.
Cameron is doing nothing more than trying to fool the public into thinking he is taking positive action against tax avoidance by large corporations – something which could not be farther from the truth.
If he wanted to make a significant difference he should start with those in his own government and their associated cronies who have decades of experience in making their fortunes invisible to the UK duty men – he is certainly not fooling us.
What could be achieved by this agreement is the destruction of the local economy as those who do bank in the territories abandon banks, so the banks will close, which will create unemployment. Former account holders will have no reason to visit these territories which will affect their contribution to local trade and taxes, and if they have a residence, they will simply sell up – no longer having a reason to visit.
As more of the world has opened up to business and finance, there are (as many of Cameron’s mates will know) more options available to those who wish to ‘hide’ significant amounts of cash from the taxman’s eyes.
Switzerland has always been a popular choice, along with Dubai, then there are the independent financial facilities offered by many stable South American countries.
Cameron must also presume that banks are extremely stupid if he thinks that they are going to allow customers who have trillions of dollars deposited in offshore accounts to take a large tax hit from the UK government – it would be more than their business is worth, with serious ramifications for their international banking operations.
The super high non-tax payers will already be working on alternatives if they bank in any of the territories which form part of this agreement.
Perhaps the next step will be towards a global taxation system which will take us closer to globalisation and the dominance of the New World Order.
So Cameron, more public smoke and mirrors to try and fool the public – and not very good smoke and mirrors at that. What a chimp (sorry chimps).