Calls to ban tax haven firms from pocketing Government bailouts

MINISTERS are facing calls to crack down on companies based in tax havens that claim financial aid from the UK Government.

The move would follow measures introduced in recent days in France, Denmark and Poland, which are imposing tough conditions on firms which have used their offshore status to reduce their tax bills.

France’s finance minister Bruno Le Maire said it would rule out state aid – including bailouts or support to pay staff – to companies with subsidiaries based in low tax jurisdictions.

Tax campaigners have urged the UK Government to go further than France and Denmark, which are using the EU definition of tax havens that excludes the likes of Bermuda and the British Virgin Islands.

Some well known names on British high streets and the hospitality sector are owned through holding companies based in tax havens such as the Cayman

Islands. Ed Davey, acting leader of the Lib Dems, said: ‘Companies that funnelled earnings offshore to avoid paying their fair share of tax do not deserve support when times get tough. We are calling for businesses to register in the UK if they want support from the taxpayer. If businesses want help, they’ll have to leave their tax-avoiding havens behind.’

Robert Palmer, executive director of Tax Justice UK, said: ‘If the Government is going to bail out companies involved in tax havens, it needs to impose a series of conditions that means they are actually paying their fair share of tax.

‘We should say, “Look, we bailed you out when you really needed it. In future, you are going to have to play a better role as a corporate citizen.”’