States ‘happy’ to work with critical Labour MP

States ‘happy’ to work with critical Labour MP

John Mann, a Labour MP, announced that his Treasury sub-committee was due to carry out a six-month investigation of tax evasion and avoidance, and called on representatives from Britain’s Crown Dependencies and Overseas Territories to explain the role they play in ‘hiding the wealth of the world’s financial elite’.

Mr Mann singled out Jersey, Guernsey, the Isle of Man, Bermuda, the Cayman Islands and the British Virgin Islands in particular for criticism, claiming that their inclusion on a so-called EU ‘grey-list’ of jurisdictions, members of which have been asked to reform their tax structures this year or face blacklisting, was a matter of ‘national shame’ for the UK as their parent nation. Jersey was asked by the EU to address the issue of economic substance – whether companies registered for tax purposes in the Island carry out real activity – and Chief Minister Ian Gorst said new legislation was being considered in response.

In response to Mr Mann’s comments, a States spokeswoman said that Jersey ‘is not a safe harbour for rogue operations’ and pointed out that it was not named on the EU’s full ‘blacklist’ of non-cooperative jurisdictions, which was published last December.

‘We run a professional, well-regulated international finance centre that expects companies using our services to pay the tax that is due in the jurisdictions where it is owed,’ she said. ‘Jersey does not want abusive tax avoidance schemes operating in the Island. Jersey is not on the EU Code Group’s blacklist, and was confirmed as a co-operative jurisdiction. The Code Group is now working with the Island to ensure that this position is maintained.’

She added: ‘The government of Jersey regularly engages with parliamentarians from across the House [of Commons], including the Treasury sub-committee. We are happy to provide information to the sub-committee on the Island’s robust financial regulation and co-operation with HMRC and the European Union.’

Geoff Cook, chief executive of Jersey Finance Ltd, said that his organisation, which represents the finance sector, supported the government’s co-operation with the EU and other international bodies.

‘Jersey has made a public, written commitment to address concerns relating to a perceived lack of legal substance requirements that could lead to profits being registered in Jersey that do not demonstrate real economic activity,’ he said. ‘We are committed to creating a clear and safe environment for investors both now and in the future and welcome any necessary mechanisms and measures to ensure our continued delivery of the highest possible standards.’

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