Switzerland, Hong Kong, Singapore, Andorra and Lichtenstein last week reached agreement with the Organisation for Economic Cooperation and Development on implementing international standards to combat tax evasion.
But Chartwell Finance Management director John Boyle says the Government should avoid tarring legitimate offshore centres with the same brush as more secretive jurisdictions.
Boyle says: “Some of the more esoteric tax havens have given legitimate offshore investment business a bad name. Bank accounts in the Isle of Man, for example, have been within the scope of the EU savings directive for a number of years and are already operating in a taxable environment.”
Friends Provident International technical services manager Brendan Harper says so-called “secrecy jurisdictions” which maintain strict banking secrecy laws are likely to come under increasing pressure to cooperate in the crackdown.
But Harper says the Government has used the offshore debate to divert attention from its regulatory failings in the financial crisis and questions its motivation for commissioning Michael Foot’s review of offshore centres. He says: “You have to wonder if the review was planned or did it come about to justify Alistair Darling’s off-the-cuff comments about the Isle of Man?”
Harper is confident that the Isle of Man will withstand the clampdown. Last week, the Government also signed a new tax information exchange agreement with Jersey, allowing HM Revenue & Customs to request any information from the Jersey tax authorities that it would ordinarily be able to access if an organisation was situated in the UK