UK

Clamp Down On Tax Evasion, David Cameron To Urge Leaders

15/06/2013 08:28 BST | Updated 15/06/2013 10:02 BST

David Cameron will tell leaders from Britain's network of overseas territories and Crown dependencies that they must do more to clamp down on tax evasion and aggressive tax avoidance.

The prime minister has summoned representatives for talks in Downing Street on Saturday ahead of next week's G8 summit at Lough Erne in Northern Ireland where he has made international tax compliance one of the key issues on the agenda.

david cameron

The prime minister's move has won the backing of labour leader Ed Miliband

The move reflects an acknowledgment by Cameron that the UK needs to "get its own house in order" if he is to persuade the G8 leaders to sign up to the development of a set of global standards on the exchange of information between tax authorities.

Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man, are all expected to be represented at the meeting.

Many of the islands and outposts are regarded as tax havens - a description they bitterly dispute - where wealthy individuals and businesses can shield their fortunes from the prying eyes of onshore tax authorities.

Cameron will welcome commitments which have already been made to join a pilot project being launched later this year to trial information exchange procedures.

But he will press them to go further and sign up to the Organisation for Economic Co-operation and Development's (OECD) convention on mutual assistance in tax matters.

Labour leader Ed Miliband welcomed the move and said the prime minister must be prepared, if necessary, to get tough with any which refuse to comply.

"Britain, which has responsibility for arguably the biggest network of tax havens in the world, needs to use all its considerable legal power and authority to ensure all the UK overseas territories and Crown dependencies which act as tax havens sign up," he said in an article for The Independent.

"Today’s announcement offers a way forward against tax dodging. But we can’t promote transparency with a secret list and we have to make sure that poor countries benefit," Sally Copley, the spokeswoman for Enough Food For Everyone IF campaign told HuffPost UK.

"A G8 agreement on public registries and to automatically share tax information with poor countries is now even more essential. Poor countries must be able to collect the money they need to end the scandal that sees 1 in 8 people go to bed hungry. The G8’s global credibility is on the line.”

Cameron, who is also hosting a pre-summit conference in London on trade, tax and transparency, will issue a call for a new drive to tackle corruption in the developing world.

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He will say that while international aid had increased in the eight years since the UK lasted hosted the G8, not enough has been done to address the root causes of poverty.

"For too long the international community has shied away from condemning the appalling degree of corruption and mismanagement of resources and the fundamentally bad governance that is destroying lives in some developing countries. And there are always voices saying: why cause the stir; why be the one to point the finger?" he is expected to say.

"Well Britain has kept our aid promises so I don't think we should hold back. Corruption is wrong. It starves the poor. It poisons the system. It saps the faith of people in progress. It wrecks the case for aid. When we see it we should condemn it utterly.

"The extraordinary thing about this tax, transparency and trade agenda is that it's not just the right thing for us to do morally, it's right for our economies too because when some businesses don't pay their taxes, it corrodes public trust. When some companies don't play by the rules, it drives more regulation and makes it harder for other businesses to turn a profit.

"And when Africa doesn't trade to its potential, we all lose the chance to benefit from trading with one of the fastest growing continents on the planet. In short: getting this right is good for us and it's vital for developing countries too."

Treasury Chief Secretary Danny Alexander said ministers hoped that other countries would be prepared to create their own registers of beneficial ownership.

"It would be preferable for every country in the world to have such a register and then for that information to be shareable and shared openly between tax jurisdictions," he told the BBC Radio 4 Today programme.

"There are a lot of changes that we are making to our own tax system to ensure that we can collect the tax that people owe, but we are also trying to make sure that, for the good of the UK but also for the good of the developing world too, that this information is shared and open so that every country in the world can get the tax that they are due."