Bermuda a key target in tax haven accusations

David Cameron today faces pressure to abolish the UK’s tax havens as a charity singled out Bermuda as a key target amid reports that Google has increased the royalty payments it shifts through the island to avoid tax .

War on Want accused the government of hypocrisy by calling for more international action to tackle tax havens, and the impact of tax avoidance by multinational companies like Google, while failing to tackle the tax havens in the British Overseas Territories, such as Bermuda and the Cayman Islands.

Google funnelled £6 billion through Bermuda last year, a quarter more than in 2011, diverting 80 per cent of its global revenue through the tiny island in the North Atlantic Ocean. The company reportedly sent £2.6 billion of British profits via Bermuda, reducing its UK tax bill by more than £200 million, while globally avoiding a total of £1 billion through the scheme.

In September, David Cameron claimed it was not ‘fair’ to label the British Overseas Territories, including Bermuda, as ‘tax havens’. Cameron’s claim comes despite Bermuda having no corporate income tax, no registers of company ownership, no requirement to file company accounts and recently being ranked the 14th most significant tax haven in the world by the Tax Justice Network.

War on Want signalled its call as Britain opened a summit for overseas territories in London, which the charity branded “window dressing”, while the UK continues to duck the need for legislation to kill off tax haven abuse.

It accused Google and other tax-dodging companies, including Amazon and Starbucks, of denying Britain vital funds, amid savage cuts in jobs and vital public services, like healthcare and education, and growing poverty and inequality.

War on Want tax campaigner Murray Worthy said: “Google’s multibillion pound business is able to avoid taxes in the UK and around the world because of the secrecy and low tax rates offered by Bermuda, a territory the UK government has ultimate responsibility for.

“Cameron declares there are too many tax havens, too many places where people and businesses manage to avoid paying taxes. Yet, at the same time, he refuses to eradicate Britain’s own global network of tax havens.

“Rather than ignoring the facts and pretending these places aren’t tax havens, the government should be using this summit to finally tackle the UK’s devastating network of tax havens that enable the global scourge of tax avoidance and evasion.”

War on Want pointed to a staggering £20 trillion now held by rich individuals in “secrecy jurisdictions”, better known as tax havens – equivalent to more than 13 times the annual output of the UK economy.

If the money was taxed, this could generate as much as £180 billion a year in revenue, more than twice the amount rich countries spend on overseas aid.