Most of the Tax Havens are British - set up so that big business could avoid paying its just taxes and crazy Gilbertian laws were made at the behest of lobbyists to facilitate them to favour the rich. Putting the shares in to one's Monaco based wife as the Top Shop's Phillip Green has done is a clear case of tax evasion. A brass plate on a sterile Cayman Island's building representing the headquarters of a business which operates wholly within the UK market makes a mockery of the morals of corporate activity. The tax laws should be amended to avoid such loop-holes. Profits on any economic activity deriving from the British market should pay their full whack of taxes to the UK Treasury no matter where the Headquarters of the company or the shareholders are registered be they genuinely foreign or not. If the UK market is profitable for them they will engage in trade here. Their target is the UK market. Ireland's lower corporate tax rate is successful because of its attractions to foreign companies who wish to avail of its membership of the Eurozone market and not for the Ireland's small domestic market. Exporting to countries in the same currency area offers enormous advantages in accounting, estimating of profits, the lack of need for forward exchange contracts for sales and repatriation of profits and leads to higher corporate profits. Ireland's highly sophisticated infrastructure and its high-tech educated work force make it a much more competitive base then UK for Eurozone exports. Indeed the 64% of UK'S exports which go to the Eurozone would similarly benefit profit wise if they were Ireland based. With the revamping of the tax laws should come the nationalisation of the banks. The Government does not even to have to go to this extent: all it has to do is to upgrade the Post Office computers - give interest on deposit accounts financed from interest on loans and overdrafts to industry and small businesses as the banks did in days of yore when we had financial stability.The banks would have their comeuppance in one fell swoop.

That is an amazingly succinct solution posed by Marcus Bessner which I applaud. I have proposed something similar to the Lib Dems but it fell on deaf ears. There are signs of a shift in the thinking of the populace at large - there are revolutionary feelings in the air - of which the riots are symptomatic.We need to get rid of the present government and its opposition and start afresh. The Tax Havens and the wars are robbing us of the funds needed to revive the economy.

I think that is disingenuous Nick. What they (appear) to be doing is setting up (fake) operations and avoiding tax illegally.

A Radio 4 documentary looked at the practice of 'locating' a company's Treasury Division in Ireland. The Treasury Division naturally makes a huge profit on which it pays corporation tax at the Irish rate (12.5%).

The Treasury Division has no employees in Ireland and the only thing there is an accommodation address. The whole thing is a fiction but they get away with it.

@Andrew:

Certainly true in some cases, but the bulk of the 34,216 companies, and the vast majority of the tax haven companies, are owned by companies of British origin, such as WPP, Barclays or BP.

Interesting that you pick the example of Khazakhmys. As a UK-registered company its group tax liability is in the UK, so use of tax havens is of concern to us. Better to pick Glencore or WPP, listed on the LSE but incorporated offshore.

And whats new?
We always knew this, the only problem is if we try and crack down on them,they will just up sticks and move somewhere else.

"Quick question - Do shareholders benefit by the increased income generated from the lower tax payments by the company? Or does this saving go somewhere else?"

Most insurance companies (auto, fire, house contents, travel etc) have tax haven subsidiaries. Have a look at your insurance policy small print and you'll find a Caymans Island or Dutch Antilles mentioned.

This results in your travel insurance being cheaper than it would otherwise and the insurance company making higher profits.

The fact that you are located in a tax haven doesn't mean taxes are being dodged. For example many investment funds are set up in tax havens, but investment gains from the funds are still taxable income for the holders. No tax has been avoided or evaded.

Similarly, many companies will issue debt in offshore vehicles for the same reason.

All your ideas are premised on an assumption that what we sell as a country is goods from a roughly standing start when it comes to low-value, and these only if they are compettitively cheap. Which seems of lttle chance re the developing world. You are essentially advocating racing developing nations to the bottom. I believe that we as a nation are well beyond that in our individual understandings of what constitutes society. So it's not going to succeed, merely lead to revolution. We need to instead devise a new approach, or build on strengths. Services and intellectual property can be exports too.

ActionAid has a petition attached to the interactive map on this: http://www.actionaid.org.uk/103031/ftse_100_tax_haven_tracker.html#petition

12.5% corporation tax rate really helped Ireland. I mean Osborne praised that economy and lectured Gordon Brown way back in 2006.

http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/a...