1000 tax haven subsidiaries of the top 20 companies | Mail Online

SPECIAL INVESTIGATION: 1,000 tax haven subsidiaries of the top 20 companies | Mail Online
25/01/11 10:10
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SPECIAL INVESTIGATION: 1,000 tax haven
subsidiaries of the top 20 companies
By Lawrie Holmes and Alex Hawkes
Last updated at 10:10 PM on 22nd January 2011
When Barclays boss Bob Diamond confirmed that the bank had about 300 subsidiaries in tax havens there were gasps of
dismay at a Treasury Select Committee hearing earlier this month.
Few at the highly charged meeting would have believed such a vast network of offshore companies existed, potentially allowing
the bank and its clients to avoid huge sums in tax. They would still be in the dark had MP Chuka Umunna not put the figure to
Diamond in the first place.
But a Financial Mail investigation can reveal that Barclays' Byzantine structure is far from unusual. In fact it is more the tip of the
iceberg as far as Britain's biggest companies are concerned. More than 1,000 subsidiaries in offshore tax havens are operated
by Britain's 20 biggest companies alone.
Tucked away: Many of BP's companies are based in Bermuda
Yet Britain's tax authorities are currently at war with secretive tax jurisdictions. Only last Friday Revenue & Customs held its
first meeting with Swiss negotiators over a plan to retrieve tax from the more than £100 billion salted away by UK taxpayers in
bank accounts in Switzerland, Financial Mail understands.
The biggest corporations are unlikely to be evading tax in the same way as individuals, but through their networks of
subsidiaries they can structure their affairs to avoid tax.
And while there is no way of measuring exactly the amount of tax that companies have avoided paying the Exchequer over the
years because of their opaque offshore structure, the level of their presence in secretive offshore jurisdictions raises serious
questions as to what they are doing there.
At a time when we are told we are 'all in this together', many will want to know whether hard-working Britons are picking up the
tab for tax unpaid by our biggest companies.
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SPECIAL INVESTIGATION: 1,000 tax haven subsidiaries of the top 20 companies | Mail Online
25/01/11 10:10
Umunna, Labour MP for Streatham, south London, said: 'Tax avoidance by large companies on a massive scale has been
ongoing for years and it is time this Government got a grip on it. This is costing the Exchequer in excess of £25 billion a year.
We could reduce this deficit by clamping down on loopholes and ensuring Revenue & Customs has the resources to do this.'
Among the biggest hoarders of subsidiaries - with 85 in ultra-secret jurisdictions, according to Companies House - is BP. In an
ironic twist, its head of tax, John Bartlett, was this month appointed by the Government to sit on a study group on tax
avoidance. According to the Treasury, the group 'is part of the Government's commitment to tackling tax avoidance and building
sustainable defences to address long-standing avoidance risks'.
A spokesman for BP said it had only 67 companies registered in offshore territories. 'Bermuda and Luxembourg together
account for two-thirds of these - Bermuda mostly because many BP Shippingrelated companies are based there and
Luxembourg because of our pan-European trading and marketing activities,' he said.
Vodafone, which is in dispute with New Delhi over its tax bill, has 20 companies on the Indian Ocean island of Mauritius, which
has an agreement allowing companies to avoid Indian capital gains tax.
The telecoms giant also recently struck a deal with the taxman over tax due from a Luxembourg subsidiary. Critics say it got off
with a £1.2 billion bill where it should have paid £6 billion - and the National Audit Office is now investigating the tax authorities
in an attempt to see if proper procedures were followed in this and other cases. Vodafone has 50 companies in tax havens. A
spokesman said: 'When we acquired our stake in India, we purchased a Cayman company from Hutchison and beneath that
were a number of Mauritian companies.'
HSBC has 62 firms in offshore centres, mostly in the Channel Islands and the Isle of Man. The bank said it was only offering
retail banking services to local customers. Royal Bank of Scotland has 121 subsidiaries in offshore tax centres. It said that a
third of those in the Cayman Islands - where it had 70 subsidiaries according to its annual return - were British tax-resident,
meaning they pay full UK tax. It said some had since been sold while other subsidiaries were part of its international banking
operation.
Lloyds Banking Group, which has 135 offshore companies, said it complied with its tax obligations. Standard Chartered bank
has 37 subsidiaries in offshore centres.
Shell has 47 offshore subsidiaries, mainly in Bermuda, although the company said that its holding group, Royal Dutch Shell, is
based in the Hague and not British tax-resident.
Tesco has 40 subsidiaries, mainly in the Cayman Islands and Jersey. Miner Anglo American was joined by Grolsch brewer SAB
Miller in declining to give any figures.
Bill Dodwell, a corporate tax expert at accountant Deloitte, said: 'Offshore companies can be used for British tax planning, but
there are lots of cases where it's to do with favourable company law.'
A Revenue spokesman said operations in tax havens often acted as a red flag to investigators. 'If we see a company with a
subsidiary somewhere known to be a tax haven, it raises our risk assessment,' he said.
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SPECIAL INVESTIGATION: 1,000 tax haven subsidiaries of the top 20 companies | Mail Online
25/01/11 10:10
Places:
London,
Luxembourg,
Mauritius,
United Kingdom,
India,
Switzerland,
Indian Ocean
Organisations:
National Audit Office,
Treasury Select Committee
Comments (10)
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Whilst we need to shave £6 billion off the welfare budget, it would seem that in excess of £100 billion is being syphoned off out
of the country, stop this and we stop the cuts - simples..... Apparently it's all legal - but it's obviously not within the spirit of our
struggle to balance the books that we are 'all in together', it's wholly unethical and at best just serves to make the uber rich
even richer It is quite straightfoward - boycott these companies and use companies that are more aligned with our people.
- Alistair, Worthing, UK, 24/1/2011 15:27
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Rating 2
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The total inability of Governments just shows what weak leadership we have had in this country over the past 25 years, yes we
may have good universities but the 19th century story of the man with three sons still holds true, the one with the best brains
went into the City, the next went into politics and the last went into the church. Things do not change over time. Brains will win
in the end.
- Total, surrey, 23/1/2011 20:05
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Why would anyone want to pay taxes as it's clear the money is largely wasted by the Government. Much better to do everything
possible to hang on to your hard owned loot Sadly this is inly possible for the rich; the Equality laws should force the
governemtn to create some tax loop-holes for all of us AS
- Arthur Stephenson, United Kingdom, 23/1/2011 19:51
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Yet again the tax payers of this country are being rear-ended by the wealthy. David Cameron should be dealing with this a
matter of urgency yet his focus is on stripping services from the poor, fiddling with the NHS and taxing us all out of our vehicles.
Sort this out or risk a Tunisian surprise!!
- Joe Public, West Midlands, 23/1/2011 16:14
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SPECIAL INVESTIGATION: 1,000 tax haven subsidiaries of the top 20 companies | Mail Online
25/01/11 10:10
Looking at the list of "British " companies, quite a few of them have no connections with the UK apart from some HQ functions
and a listing on the UK Stock Exchange, for which the HM Treasury gets a very nice thank you. i.e Rio Tinto, Xstrata, Anglo
American, BHP Billiton - all of these are mining companies with no mines here, or refineries, or much else apart from an office .
Royal Dutch Shell generates the bulk of its earnings outside the UK, as do almost all of the non banking companies mentioned
above. Of the banks HSBC I think now does more business in the far east than in Europe - So all in all the UK needs these
companies more then the companies need the UK. If the UK is going to pull itself out of this mess it ahs got to learn to live
within its means and compete - if companies (or people) do not like it here - they will leave.
- Jremy E, Home Counties, 23/1/2011 16:03
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Is the labour MP for Streatham having a laugh .He states this government should be looking into it.What on earth was his
government doing about it for the 13 long years that they were in power,absolutely nothing by the looks of it.Can we for once
have a government any government that is not afraid to upset big business.Who is running the country the government or big
business?
- Lesley, Northumberland, 23/1/2011 13:53
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SPECIAL INVESTIGATION: 1,000 tax haven subsidiaries of the top 20 companies | Mail Online
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SPECIAL INVESTIGATION: 1,000 tax haven subsidiaries of the top 20 companies | Mail Online
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