Havens of hypocrisy.......

I have flagged up the political humbug spouted about ‘tax havens’ several times, but it seems that scarcely a week goes past without Cameron, Cable, Osborne et alia doing their ‘dog returning to its vomit’ performance.

 

So let me now turn to the Private Finance Initiative so beloved by Gordon Brown.

 

This is a device whereby the Government gets a private outfit to fund new buildings in return for a hefty annual payment.

 

This has two outcomes.

 

The first is that all the debt is off-balance sheet. If it were to be added to the national debt figure the UK would resemble Greece with knobs on.

 

The second is that the taxpayer coughs up far more than would have been the cost otherwise.

 

These PFI deals are tradable, and this is where tax havens come into the mix.

 

The offices of HMRC (would you believe) are owned by a company domiciled in Bermuda; the Home office in Guernsey; Defence HQ, some hospitals and around 200 school buildings partly by interests in the Channel Islands.

                                                                                                                                                                                  

These companies, of course, pay no tax on the hefty interest.

 

And another thing.

 

I have been talking to a couple of old Brummie bikers. It seems that there is a local boycott of the M6 toll road because  of excessive charges. The road is owned by a company that is making a massive loss, which is its reason for high charges, and so pays no tax, of course. And the reason for the loss in what should be a captive market is that it pays interest at no less a rate of 16% to its parent company that just happens to be registered in the Cayman Islands.

 

As they say, everything’s a racket unless you’re in it!