British 'tax havens' like the Cayman Islands and Jersey have agreed to 'get their house in order' in a new deal on tax evasion secured by the Prime Minister ahead of the G8 summit.
David Cameron said Britain's network of overseas territories and Crown dependencies have signed up to a new clampdown on tax evasion, aimed at promoting transparency and exchange of information between tax jurisdictions.
Many of the islands and outposts, like Jersey and the Cayman Islands, are regarded as tax havens - a description they bitterly dispute - where wealthy individuals can shield their fortunes from the prying eyes of onshore tax authorities.
The Prime Minister hailed the agreement as a "very positive step forward" which would strengthen his hand in talks with the other G8 leaders in which he has made improving international tax compliance a key issue.
The Prime Minister said they had had a "very good" meeting.
"Let's be clear why this tax issue matters. If companies don't pay their taxes or individuals don't pay their taxes we all suffer as a result," he said.
"It is important we are getting our house in order. What the Crown dependencies - places like Jersey and the Isle of Man, and the overseas territories - places like the Cayman Islands - have signed up to is basically the existing and the new standards for exchanging tax information. That is absolutely vital.
"It is a very positive step forward and it means that Britain's voice in the G8 and the campaigning on this issue around the world for proper taxes, proper companies and proper laws ... will be stronger."
Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man were all represented at the talks.
Cameron talks about Jersey etc. as if they are not under his authority. These tax havens are still subject to UK law which can be changed.— John Lipnicki (@john_lipnicki) June 15, 2013
Under the agreement, they will trial an international pilot programme which will see the automatic exchange of information between tax jurisdictions while also signing up to the Organisation for Economic Co-operation and Development's (OECD) convention on mutual assistance on tax.
They also agreed to publish national action plans on beneficial ownership - declaring the true owners of so-called "shell" companies.
In a joint statement, the chief ministers of Jersey, Guernsey and the Isle of Man said they welcomed Cameron's willingness to work in partnership with them on improving international standards.
"We are committed to continuing to play a leading role in delivering a responsible and effectively regulated global business environment and in tackling the global problem of tax evasion," he said.
Earlier, Cameron announced plans to establish a register of beneficial ownership in the UK as part of his drive for transparency on tax.
"We need to know more about who owns which company - beneficial ownership - because that is how a lot of people and a lot of companies avoid tax, using secretive companies in secretive locations," he said.
"The way to sweep away the secrecy and get to the bottom of tax avoidance and tax evasion and cracking down on corruption is to have a register of beneficial ownerships so the tax authorities can see who owns beneficially every company."
Under the proposals, UK-registered companies will have a legal obligation to obtain and hold adequate, accurate and current information on the ultimate owner who benefits from the company.
The information would be entered on a central register that would be maintained by Companies House.
Initially, the information would only be made available in Britain to authorities such as Revenue and Customs, but ministers are to consult on whether it should be made public.
Speaking at a pre-summit conference at Lancaster House, the Prime Minister indicated that while he would like to make the register public, it would depend on other nations being prepared to follow suit.
"The most important thing here is that that information is available to tax authorities. It will be their first port of call to try to uncover corrupt payments or tax evasion," he said.
"Personally, I would hope the whole world will move towards public registers of beneficial ownership, but I want to maximise the leverage that the UK has got over others in terms of each step in turn.
"Also, I want to make sure that business and enterprise comes with us on this debate."
The agreement was cautiously welcomed by poverty campaigners like Oxfam, Save The Children and ActionAid.
We've won again! All 10 UK tax havens have agreed to sign a multilateral agreement that will help tackle tax dodging. #IF— Stephen Brown (@LordBrownof) June 15, 2013
Cameron's announcement came as a mass anti-G8 rally took place in Belfast, ahead of the G8 summit. Around 1,500 protesters marched in torrential rain from the city's Custom House, past borded up shop fronts.
Spirits were high and there were initially no signs of the disorder that some in Belfast had feared. Hundreds of public order police officers flanked the route with scores of fortified Land Rover-type vehicles also parked up and police helicopters circled overhead.
The G8 leaders are arriving at the Lough Erne golf resort in Fermanagh for the two-day meeting starting on Monday.