Jersey finance industry defended after tax avoidance claims
- 19 June 2012
- From the section Jersey
The body representing Jersey's finance industry has defended the island after a newspaper article about a tax avoidance scheme.
The Times newspaper reported the K2 scheme could shelter money from the UK tax man even though the UK government was cracking down on tax avoidance.
But Jersey Finance's Geoff Cook said the position on tax evasion was clear.
"Tax evasion is illegal in Jersey and it is a criminal offence to facilitate or engage in it," he said.
He added: "Jersey is, and remains, one of the best regulated international finance centres in the world."
'Threat to democracy'
The Times reported the Jersey-based scheme, which had been disclosed to all the relevant bodies in accordance with legal requirements, allowed thousands of wealthy people in Britain to pay as little as 1% in income tax.
Mr Cook said: "In our view, conflation between illegal tax evasion and legal tax avoidance, or tax planning, is unhelpful in moving any wider debate forward and the articles in today's edition of The Times raise some important points in this area."
John Shenton, tax director of the company Grant Thornton, said there were many schemes which were written and marketed in the UK, but were only administered in Jersey.
He said: "Jersey hasn't written the scheme as far as I'm aware, it hasn't promoted the scheme... the only problem here is the fact the administrator happens to be physically located in Jersey."
Richard Murphy, the director of Tax Justice Network, said tax avoidance was to be expected from the island.
He said: "Jersey is a key component in the international tax avoidance industry whose primary purpose is to deny governments the revenues they need to balance their books to provide a stable economy in which people can live, work and thrive.
"It is therefore undermining the stability of the world economy and that is its purpose.
"If you call that a well regulated financial services centre well so be it, but I call it a threat to democracy."