Britain has been described as the “greatest enabler of corporate tax avoidance in the world” after it was revealed eight out of the ten jurisdictions with the highest corporate tax haven scores are British territories.
Research by the Tax Justice Network found the UK and its “corporate tax haven network” to be by far the world’s greatest enabler of corporate tax avoidance, with scores of its territories and dependencies landing in the top 10 offender list.
The British Virgin Islands, Bermuda, the Cayman Islands, Turks and Caicos Islands, Anguilla, the Isle of Man, Jersey and Guernsey all appeared on the list, with the UK as a whole ranked in 13th.
Shadow chancellor, John McDonnell, said the findings showed the government’s record on tax avoidance was “embarrassing and shameful”.
He said: “The only way the UK stands out internationally on tax is in leading a race to the bottom in creating tax loopholes and dismantling the tax systems of countries in the global south.
“The rot has to stop. While Tory leadership hopefuls promise tax giveaways for the rich, a Labour government will implement the most comprehensive plan ever seen in the UK to tackle tax avoidance and evasion.”
The index scores each country’s system based on the degree to which it enables corporate tax avoidance, combined with the scale of its corporate activity, to determine the share of global corporate activity put at risk of tax avoidance by the country.
At the top of the list was the British Virgin Islands, followed by Bermuda and the Cayman Islands – all British overseas territories.
The network said that through its network of satellite jurisdictions, the UK bore the lion’s share of responsibility for the “breakdown of the global corporate tax system”.
It added: “The UK, with its corporate tax haven network, is by far the world’s greatest enabler of corporate tax avoidance and has single-handedly done the most to break down the global corporate tax system, accounting for over a third of the world’s corporate tax avoidance risks.
“That’s four times more than the next greatest contributor of corporate tax avoidance risks, the Netherlands, which accounts for less than 7 per cent.”