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In an ill-informed attack Ed Miliband, leader of the Labour opposition, has called for the EU to take action against the British Crown Dependencies (Jersey, Guernsey and the Isle of Man) which he claims are “tax havens” which are ill regulated and where tax avoidance and tax evasion goes on to the detriment of the UK and the European Union.

I can only assume this is yet another attempt by politicians whose own economies are in trouble to blame someone else for problems that they brought on themselves.

If Miliband had bothered to read recent reports from the EU, the OECD (Organisation for Economic Cooperation & Development) and the World Bank he would see that the Crown Dependencies are praised for their regulatory regimes and far from damaging the UK economy figures the OECD and World Bank calculate that the Crown Dependencies actually contribute billions of pounds into the economy.

Indeed back in 2008 the then Labour government commissioned the Foot Review to examine the effect of the Crown Dependencies on the UK economy. When it was published that report highlighted the value that Jersey, Guernsey and the Isle of Man provided to the UK during the banking crisis in the form of hundreds of billions of pounds of liquidity. That contribution continues to this day.

In addition the Foot Report concluded that the amount of tax avoided by UK companies using British Crown Dependencies and Overseas Territories were “significantly lower than estimates produced by previous studies suggested”.

Tax evasion is illegal in the Crown Dependencies where it is a criminal offence – not a civil one – to facilitate or engage in tax evasion. Jersey, Guernsey and the Isle of Man all have Double Taxation Agreements (DTAs) with the UK and Tax Information Exchange Agreements (TIEAs) with many other countries and indeed the Isle of Man has more such agreements than several EU member states have.

To claim, as Ed Miliband has, that the Crown Dependencies do not cooperate with HM Revenue & Customs is simply and totally wrong. Perhaps Miliband has been spending too much time reading the output of self-appointed lobby groups such as the Tax Justice Network whose claims about the amount of tax lost to avoidance is considered by HMRC itself to be vastly inflated.

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  1. Ed Miliband Talking Rubbish Again « greatbizinfo - June 18, 2012

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