Below is the text of the letter from several taxwatchers published in the Isle of Man Examiner on 2 February 2016:
We stand by Cat’s ‘tax haven’ views
Cat Turner deserves credit for her appearance in ‘The Town That Took on the Taxman’, recently screened by the BBC.
The programme featured the role of a Douglas-based Corporate Service Provider in enabling Caffe Nero, a major UK coffee retail chain, to avoid paying any UK corporation tax. This was contrasted with the plight of an independent coffee shop owner in the Welsh town of Crickhowell, who was obliged to pay 20% corporation tax and so felt unfairly treated.
The programme brought home just how unacceptable it has become in the UK – and elsewhere – to escape tax obligations by means of offshore finance centres.
Google’s recent settlement with the UK tax authorities, under which it will now pay tax according to where it makes its sales and earns its profits, is an example of the shifting boundary between acceptable and aggressive tax avoidance. Rules are tightening up across the globe.
Further instances of unacceptable tax avoidance, not mentioned in the programme, are the scores of IoM firms who provide ‘disguised remuneration’ schemes, artificially routing the pay of off-Island self-employed workers via the IoM.
Tynwald and our regulator the Financial Services Authority need to investigate and take action against all these practices to prevent the Isle of Man’s reputation being further sullied.
J E Tomlinson
W R Tomlinson