Of the 100 biggest groups listed on the London Stock Exchange, 98 use tax havens. Many FTSE 100 groups are set to benefit from plans currently under consideration by the Treasury to give multinational companies using tax havens an £840 million tax break. The effective corporate tax rate in Jersey and in the Cayman Islands is 0 per cent. So, it’s no surprise that there are more than 600 FTSE 100 subsidiary companies in Jersey and 400 in the Caymans.
A US Senate report estimated that the USA could be losing $100 billion a year to tax havens. Estimates for Britain vary, but the figure could be as high as £18 billion. The OECD estimates that developing countries lose almost three times more to tax havens than all the aid they receive each year.
For example, Grolsch and Peroni owner SABMiller has been shifting so much of its profits out of Ghana and into tax havens that its Ghanaian subsidiary has been declaring a loss, thereby paying no corporation tax. Incredibly, this means that a woman who runs a market stall selling beer in Accra pays more corporation tax in Ghana than the giant multinational whose British company declares profits in excess of £2 billion a year.
The banks make the heaviest use of tax havens, with a total of 1,649 tax haven companies between the “big four” banks; Barclays alone has 174 companies in the Cayman Islands. BP and Shell have almost 1,000 tax haven companies between them. ■