By Prof Dr Ian Blackshaw
The so-called ‘Paradise Papers’ comprising some 13.4 million confidential tax files and covering the period 1950 – 2016, have been leaked to the media; initially to the German newspaper, Suddeutsche Zeitung, which also received the ‘Panama Papers’ last year, and the newspaper has shared this explosive material with the International Consortium of Investigative Journalists, which is based in the US.
This leak, once again, has firmly placed tax avoidance on the international agenda!
Amongst the Papers is a data base of a Bermuda Law Firm – Appleby – which contains the names of more than 120,000 individuals and companies. Many of them come from the UK, China and Hong Kong, but by far the largest number – some 30,000 – come from the US.
They appear to be clients of the Appleby Law Firm, who have been tax sheltering their fortunes by a variety of tax avoidance schemes, including the use of offshore companies and/or trusts in Bermuda, the Cayman Islands, the British Virgin Islands and the Isle of Man.
A number of the high-profile individuals and companies involved come from the sporting world.
For example, it is reported that Lewis Hamilton, the four-times Formula One Champion, avoided tax on his £17 million private jet using an Isle of Man scheme.
And Gary Lineker, the former England striker and now BBC football pundit, who is reputed to earn, as such, around £2 million a year, has also been reported as being involved in tax avoidance to buy a home in Barbados.
Also, the leading sportswear manufacturer, NIKE, is reported to have channelled its multi-million-dollar profits through The Netherlands and The Caribbean to save tax being paid on them.
It is also reported that even the Queen of England has invested millions of GB pounds in a Caymans Islands Trust Fund.
It should be made clear that tax avoidance – arranging your affairs in such a way as to reduce the tax bill – is quite legal, whereas tax evasion – hiding income liable to tax – is not and, in fact, is a criminal offence.
The Appleby Law Firm has denied any wrongdoing, either by itself or on behalf of any of its clients, and has agreed to cooperate in any formal enquiries initiated by any of the relevant tax and/or other authorities as a result of the leak of these Papers.
Prof Dr Ian Blackshaw may be contacted by e-mail at ‘email@example.com’