Only five cabinet ministers are ready to publicly confirm that they and their families do not benefit from the use of tax havens or stateless status.
The ministers’ financial affairs were scrutinized after The Independent revealed that Rishi Sunak’s wife had used her stateless status to reduce her tax burden in the United Kingdom, and documents show that the chancellor has been identified as a beneficiary of trusts. held in tax havens. Health Minister Sajid Javid revealed that he had tax status without statehood before becoming a politician.
But when questioned by The Independent, only five of Boris Johnson’s 22 cabinet members were willing to say they had no ties to tax havens and did not use stateless tax breaks.
Labor said ministers needed to be more transparent about their financial interests.
“We need to know what measures the cabinet members have taken for themselves. And if there were such arrangements, how were they justified and how much tax was saved? ”Said Pat McFadden, the shadow secretary general of the Treasury.
“This is not a mechanism open to our voters, who are facing the biggest drop in their income in decades, exacerbated by the chancellor’s decision to impose an increase in income taxes this year.
“The least the public is entitled to is full information on how many conservative ministers imposing these increases have had non-domestic status or have used other mechanisms, including tax havens, to reduce their tax liabilities in the UK.
The status of homeless people and tax havens are perfectly legal, but their use by ministers has been called into question at a time when the government has decided to impose the heaviest tax burden on British families since the 1940s.
However, some cabinet ministers have decided to offer the public more transparency. Business Secretary Quasi Quarteng, Defense Minister Ben Wallace and Transport Minister Grant Shaps, along with their close families, do not use tax havens to keep their tax bills to a minimum, sources close to them told The Independent.
They have also not used homelessness status, a controversial system that has existed for hundreds of years and allows wealthy people to avoid paying income tax in the UK.
Education Secretary Nadim Zahawi and his wife are not currently using homeless status, according to sources. However, it is unclear whether they have historically used or continue to use tax havens. Meanwhile, George Justis, the environment minister, said in an interview with the broadcast that he would never seek homeless status.
A separate government spokesman said: “All MPs and current colleagues are automatically considered to be resident in the UK for tax purposes by law. In accordance with the Ministerial Code, all ministers provide information on their tax matters to the cabinet and an independent ministerial adviser.
Questions about the financial issues of the most influential politicians in the United Kingdom arose after The Independent revealed that Mr Sunak, the Chancellor, had not made public the favorable tax status of his wife Akshata Merti.
Last week, The Independent also reported allegations that Mr Sunak was named in 2020 as a beneficiary of tax haven trusts set up to manage the interests of Ms Murty’s family, something a spokesman said the couple does not recognize. The same spokesman did not answer the question of whether Mr Sunak had set up his own trust in a tax haven.
In an attempt to highlight the controversy, Mr Sunak asked over the weekend Lord Hyde, the prime minister’s independent adviser on ministerial interests, to review all his declarations after joining the government in 2018. № 10 said he would an investigation by Lord Hyde on Monday, but insisted Johnson had “full confidence” in the chancellor.
Ministers are required to declare the interests of their spouses, as set out in the code they sign when they take office. The decision on whether this information is made public by entering it in the ministerial register of interests is less clear.
The rules allow ministers to place their shares and some other financial interests in blind confidence. This is the position taken by the Chancellor. However, there is no legal or technical definition of what constitutes blind trust or its management.
Several service cabinet members have built successful careers in the financial services industry, including Mr. Sunak, who before entering politics worked for the investment company Theleme Partners, which is registered in the Cayman Islands – a tax haven – and previously The Children’s Investment Fund Management, which is also registered there.
Some investment companies choose to be based in tax havens because it makes it easier to avoid so-called double taxation – the idea is that servicing a range of global investors is easier if everyone pays only one set of taxes in their own jurisdiction. , as well as when they receive paid profits from an offshore investment fund.
However, there are other reasons why funds or individuals choose to use tax havens. These may include significant tax breaks that come from the use of offshore trusts, such as tax evasion or capital gains avoidance, as well as significant secrecy provided by many tax haven jurisdictions.
Last Sunday, Mr Javid, also a former financial services professional, shared a statement confirming that he had stateless status and that before entering parliament in 2010, he had set up an overseas trust, which has now been disbanded. A spokesman declined to say where that trust was based, but The Independent realized it was not in the Cayman Islands, where some of his other financial interests were based.
“It is clear that Sajid Javid has serious questions to answer about his past tax status and how he was justified,” said Mr McFadden of Labor.
While working as a banker, Mr. Javid is associated with Dark Blue Investments, an employee income trust in which employees are paid bonuses for shares through trusts to avoid tax. The Supreme Court ruled that these bonuses must be taxed.
Experts questioned Mr Javid’s use of stateless status, given that he was born in the United Kingdom and therefore had to declare that he did not intend to live in the country in the long term.
Jacob Rees-Mogg, Brexit Minister of Opportunities, has entered his stake in Somerset Capital Management Limited, an investment firm that has operations in the Cayman Islands, in the register of MPs’ interests.
A spokesman for Alok Sharma could not be reached for comment.
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