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Ahead of G8 summit PM Cameron hails Overseas Territories’ tax evasion clampdown

PM Cameron satisfied but there are still doubts

British prime minister has hailed an agreement by the UK's Overseas Territories and Crown dependencies to sign up to a tax evasion clampdown. David Cameron said it was a “very positive step forward” ahead of the G8 meeting, which starts on Monday.

But sources from the Crown Dependencies told the BBC a proposed register of companies, revealing the true owners, may not work. They say it does not include trusts and the UK business community may object.

Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man were all represented at a meeting at No 10 on Saturday.

Many regard the islands and outposts as tax havens, although that is a label they strongly dispute. They have agreed to sign up to the Multilateral Convention on Mutual Assistance in Tax Matters - an initiative led by the Organisation for Economic Cooperation and Development (OECD).

They have also agreed to publish national action plans on beneficial ownership, detailing the true owners of so-called “shell” companies.

However, the BBC's business correspondent Joe Lynam said sources were warning ministers had not consulted the UK business community, which may reject the plan because it would prevent them saving as much corporation tax as they do at present.

They also said the register - to be held by Companies House - may never be made accessible to the public as many had hoped. The government has said initially it would be available only to authorities such as HM Revenue and Customs, but a consultation would be held on making it public.

Mr Cameron said: “Personally, I would hope the whole world will move towards public registers of beneficial ownership, but I want to maximise the leverage that the UK has got over others in terms of each step in turn.

”Also, I want to make sure that business and enterprise comes with us on this debate.“

The PM said it had been a ”very good“ meeting: ”It is important we are getting our house in order. What the Crown dependencies... have signed up to is basically the existing and the new standards for exchanging tax information. That is absolutely vital.

“It is a very positive step forward and it means that Britain's voice in the G8, and campaigning on this issue around the world for proper taxes, proper companies, proper laws... will be stronger.”

In a joint statement, the leaders of the territories and dependencies said: “We are committed to continuing to play a leading role in delivering a responsible and effectively regulated global business environment and in tackling the global problem of tax evasion.”

Alongside the new register, the government is also continuing to push for automatic information exchange with Britain's Overseas Territories and Crown dependencies.

Richard Murphy, director of Tax Research UK, told the BBC how it would work.

“If, for example, you had an account in Jersey... Jersey would have to tell the UK you've got it and how much income you earn on it automatically, without your consent.”

But he added: “Let's be honest, tax havens deliberately disguise who has accounts in their jurisdictions, whether that is individuals by some form of banking secrecy or companies through the use of trusts and offshore companies.”

Jersey, Guernsey and the Isle of Man have already agreed to some information sharing with the UK, but not all other countries.

Speaking after the meeting, Jersey's Chief Minister Ian Gorst said the label “tax haven” was “not a term we accept or acknowledge”.

“We are an open and transparent jurisdiction,” he told the BBC.

“We're already meeting current international standards. We've got over 40 tax information exchange agreements, we don't have banking secrecy law, and we've said again today to the prime minister that actually we'd like to have the OECD convention extended to us.”

Labour leader Ed Miliband said Mr Cameron must be prepared, if necessary, to get tough with any territories or dependencies which refuse to comply with the UK's demands.

“Britain, which has responsibility for arguably the biggest network of tax havens in the world, needs to use all its considerable legal power and authority to ensure all the UK overseas territories and Crown dependencies which act as tax havens sign up,” he said in an article for The Independent.

Asked about the possibility of imposing such requirements, Treasury Chief Secretary Danny Alexander told the BBC: “I think it's better to do it through persuasion... but look, if in the end it comes to that, I dare say we would consider it.”

In a report, the charity Christian Aid said the territories were the largest source of investment to developing countries, but these nations were losing tax worth £100bn a year because of the way money was moved through havens.

Mr Cameron is expected to ask leaders including US President Barack Obama and German Chancellor Angela Merkel to sign up to a new set of core principles on tax at the G8 summit at Loch Erne scheduled to begin Monday.