King Charles urged to crack down on UK's 'satellite tax havens' during reign

  • Fred Dimbleby explores claims the Channel Islands cost other nations nearly £7 billion in tax a year

King Charles has been urged to reform the constitutional relationship between the monarchy and the UK's Crown Dependencies and Overseas Territories, which one think tank has labelled "the UK's network of satellite tax havens".

The Tax Justice Network wrote an open letter to the monarch saying people avoid paying around £152 billion in tax every year through offshore low-tax jurisdictions including the Channel Islands and Isle of Man.

Of that, Jersey and Guernsey are said to collectively inflict tax losses of over £6.9 billion a year on the rest of the world.

The group says the arrangements "continue to disadvantage their own inhabitants as well as some of the poorest people globally."

Economist and campaigner Alex Cobham wrote the letter to the King, calling the territories an "unresolved legacy" from the past which multinational companies and wealthy households take advantage of:

"The UK, the Crown Dependencies and the British Overseas Territories are collectively responsible for facilitating nearly 40% of the tax revenue losses that countries around the world suffer annually to profit shifting by multinational corporations and to offshore tax evasion by primarily wealthy and powerful individuals.

“This makes the UK and its network of satellite tax havens the world’s biggest enabler of global tax abuse. Our latest estimates from the state of tax justice report put the sum of this tax loss imposed upon the world by British tax havens at over $189bn (£152bn)."

The letter says the lost tax income is worth around three times the UN's annual humanitarian aid budget.

It continues: "If the global tax losses caused by the UK, Crown Dependencies and British Overseas Territories were to be reversed, research by the University of St. Andrews and the University of Leicester estimates that 6.4 million people in lower-income countries would gain access to basic drinking water, 12.6 million would gain access to basic sanitation, and 1.2 million children would be able to attend school for an extra year.

"These positive impacts would in turn have a knock-on impact of reducing child mortality, saving the lives of over 220,000 children under the age of five over the next decade."

Writing to King Charles III and the UK Prime Minister, Rishi Sunak, Mr Cobham states: "Jersey has introduced a new form of anonymous ownership vehicle this year", which is something the island's Treasury Minister, Ian Gorst, denies.

Mr Gorst said: "Jersey meets all international tax standards and has a long-standing track record of active cooperation with the international standard-setting bodies and with the European Union."

Jersey's Treasury Minister, Ian Gorst, says the Tax Justice Network made 'numerous inaccurate claims'. Credit: ITV Channel

He went on to say the Tax Justice Network made "numerous inaccurate claims" in its letter to King Charles III: "It is factually wrong to claim, as the Tax Justice Network’s letter does, that Jersey Limited Liability Companies (LLCs) allow for anonymity. Jersey’s LLC regime, which came into force in 2022, does not allow anonymous ownership. 

"All members of an LLC must be declared by initial registration with the Jersey Financial Services Commission, and all subsequent changes in beneficial owners, controllers and significant persons must be updated within 21 days with the company registry."

"It is regrettable that the Tax Justice Network did not check with the government before making these erroneous claims."

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