Scotland formally calls on UK to close ‘tax haven’ loophole

SCOTLAND has formally called on the UK to close a legal loophole that allows Scottish firms to be used as secret offshore tax shelters.

Holyrood politicians have been demanding action on Scotland’s limited partnerships (SLPs) ever since some of the unique corporate arrangements were exposed as eastern European moneylaundering vehicles in this newspaper last year.

Now – after a series of scandals involving SLPs – Finance Secretary Derek Mackay has contacted UK ministers with recommendations for reform.

Westminster politicians, like their colleagues north of the Border, have long warned of the dangers of tax evasion and other criminality using offshore structures.

However, ministers have been slow to react to growing reports that several different kinds of British firms and SLPs were being exploited. Defenders of SLPs stress they have a legitimate purpose, including their use by Scottish law firms to create tax-efficient investment vehicles for legitimate businesses.

Striking a constructive tone, Mackay has written to Greg Clark, Secretary of State for Business, Energy and Industrial Strategy to ensure the ultimate owners of SLPs are exposed and that the companies are closely monitored.

Mackay said: “I would welcome your support in how we can ensure that SLPs are not seen as an easy means to achieve their criminal goals.

“I recognise it will be important to secure the right balance whereby we do not get rid of the many benefits that are offered to legitimate businesses through SLPs, but it is important that we are not seen as a haven for those who wish to pursue criminal activity.”