The islands of Jersey, Guernsey and the Isle of Man have signed up to a joint commitment with the British and Irish governments to tackle tax evasion and abusive tax avoidance.
The commitment comes amid ongoing controversy over the use of complex tax arrangements by celebrities, wealthy businessmen and multinational corporations to minimise their liabilities, exposed in the so-called Paradise Papers.
The leak of millions of documents from Bermuda-based law firm Appleby has cast attention on tech giant Apple’s use of corporate entities in Jersey, as well as racing driver Lewis Hamilton’s avoidance of millions in tax by using an Isle of Man scheme to rent a private jet to himself.
Speaking at the British-Irish Council in Jersey, the island’s chief minister Ian Gorst stressed that none of the activities exposed in exhaustive analysis of the papers by the International Consortium of Investigative Journalists amounted to illegal tax evasion.
“All that the ICIJ have released, they themselves have said that there is nothing illegal,” said Senator Gorst.
“The word ‘evasion’ has not been used at all, which would be a criminal offence if it had been taking place in any of our three jurisdictions.
Council members including Chief Minister of Jersey Ian Gorst, James Brokenshire and Leo Varadkar ahead of a meeting of the British Irish Council at the Hotel L’Horizon in Jersey (Stefan Rousseau/PA)
“We joined with the UK Government in committing ourselves to ensure that our island and financial services community are not used for what we might call ‘rogue operators’ and we continue to meet the very highest international standards and we’ll work together to ensure that we continue to do that.”
A communique agreed by Mr Gorst, Guernsey chief minister Gavin St Pier, Isle of Man chief minister Howard Quayle, Irish Taioseach Leo Varadkar, Scottish First Minister Nicola Sturgeon and Northern Ireland Secretary James Brokenshire, representing the UK Government, reaffirmed the administrations’ “shared commitment to meeting international standards and to working with the international community to tackle tax evasion and abusive tax avoidance”.
It added: “Members noted that this is also a global issue and requires a commitment from the whole international community to be effective.”
Mr St Pier said: “All the member administrations committed to continue to press for global standards, for that international level playing field where standards are objectively and consistently applied.”
Ms Sturgeon said she believed that all the representatives present shared her belief in the need for proper tax transparency and the closure of loopholes.
“We must have rules and regulations in place that properly promote tax transparency but also operate to close down any tax loopholes that people are using in order to unfairly minimise the tax that they pay,” said the Scottish First Minister.
“I very strongly believe that the approach to tax should not simply be that wealthy people concentrate on how little they can get away with paying. People should pay what they are fairly due to pay.”
Ms Sturgeon described tax as “our individual contribution to the collective good”, adding: “The tax we pay funds our public services, but it also funds the infrastructure and the support that businesses need to create wealth.
“That’s the social purpose of tax and this is a good opportunity to remind everybody of that.”
Absent from the summit was Welsh First Minister Carwyn Jones, and Mr Gorst said all those present offered their condolences to the family of former Welsh Assembly member Carl Sargeant, who took his own life earlier this week after being sacked from Mr Jones’s administration.
There was also no representation from Northern Ireland, due to the continuing deadlock over the formation of a power-sharing executive.