A day on, the world is still reeling from the revelations of the Panama Papers leak, the full repercussions of which are yet to be felt.
Eleven million documents leaked from Panamanian law firm Mossack Fonseca detailing how the wealthy and powerful hide their money have also shone a light on just how central the UK and its institutions are to the global offshore system, used by many for the purposes of tax avoidance.
Over half of the companies listed in the document cache are registered in the UK or UK-administered tax havens, and three British and Channel Island banks (HSBC, Coutts and Rothschild) are in the top 10 who most frequently request the firm to incorporate offshore companies for their clients. There is no suggestion of any wrongdoing by the banks.
However the Independent reports that despite the prevalence of offshore bank accounts and shell companies owned by UK based people and organisations, Her Majesty’s Revenue and Customs Office (HMRC) has only prosecuted 11 offshore tax evaders in the last five years.
On top of that, this small detail about Her Majesty’s Revenue and Customs’ offices which has re-emerged in light of the scandal.
HMRC pays rent on its London headquarters to a private company called CIHL Infrastructure Holdings, registered in the tax haven of Jersey, and its 600 regional offices from a company called Mapeley Steps Limited, which is registered in the tax haven Bermuda, as the result of a private finance initiative (PFI).
PFIs were started by the Conservative government in the early 90s, and expanded by all sitting governments since, are agreements in which companies fund construction such as buildings, infrastructure or IT systems and then effectively lease them to the public sector.
They have been widely criticised as bad value for money for the tax payer, lining private interests’ pockets at the expense of public services.
Experts estimate that PFI deals will cost the country £209bn over the next 35 years.
While all rental income on property in the UK is taxed, many campaigners have questions about why companies such as CIHL and Mapeley Steps choose to incorporate their headquarters abroad.
