King Charles has been urged to call for the breakup of the “UK’s network of satellite tax havens” through which an estimated £152bn worth of tax is avoided every year, according to campaigners.
Tax Justice Network, a coalition of researchers and activists campaigning against tax avoidance, are today calling on King Charles to use his reign as monarch to call for a revamp of laws that allow industrial scale tax avoidance in the UK, the crown dependencies and the British overseas territories.
The campaigners will tell King Charles in a letter today that they hope his coronation will “mark a pivotal moment to address the heavy financial and human cost borne by ordinary people … due to the UK and its network of tax havens over which your majesty is sovereign”.
“We believe your majesty can help by pointing the way to end one of the world’s most enduring injustices,” Alex Cobham, chief executive of the Tax Justice Network, said in the letter, which was also sent to the prime minister.
“The UK, the crown dependencies and the British overseas territories are collectively responsible for facilitating nearly 40% of the tax revenue losses that countries around the world suffer annually to profit shifting by multinational corporations and to offshore tax evasion by primarily wealthy and powerful individuals.
“This makes the UK and its network of satellite tax havens the world’s biggest enabler of global tax abuse. Our latest estimates from the state of tax justice report put the sum of this tax loss imposed upon the world by British tax havens at over $189bn (£152bn).”
The campaigners said the lost tax income is equivalent to more than three times the annual humanitarian aid budget requested by the UN.
Curbing global tax abuse is one of the UN’ssustainable development goals for 2030.
Cobham said the UK government had, in 2015-2016, showed “true leadership” in tackling tax avoidance by becoming the first country to adopt a public register of beneficial ownership and require multinational corporations to publish country by country reports on profits and tax.
“Sadly, your majesty’s government has since back-pedalled on this progress. The deadline for the crown dependencies and overseas territories to establish public beneficial ownership registers was pushed back, with recent statements by officials now hinting that the jurisdictions may never establish the registers. Jersey has even introduced a new form of anonymous ownership vehicle this year.”
Research by the University of St Andrews and University of Leicester estimates that if the global tax losses caused by the UK, crown dependencies and British overseas territories were reversed, 6.4 million people in lower-income countries would gain access to basic drinking water, 12.6 million would gain access to basic sanitation, and 1.2 million children could attend school for an extra year.
A Treasury spokesperson said the government “did not recognise” the £152bn tax loss each year.
They said the British overseas territories and crown dependencies were self-governing, “meaning locally elected leaders have the right to set their own policies to support their economies, within international standards”.
It added: “The UK has led international tax reform, which includes improving tax transparency so countries can find hidden incomes and assets, and by implementing the global minimum corporate tax, ensuring large multinational groups pay the right tax in the right place.”
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King Charles urged to use his reign to breakup UK’s ‘network of satellite tax havens’