Hats, canals and tax dodging



(an investment company incorporated with limited liability under the laws of the Republic of Panama on 12 April 1982)


Well, I expect that most of you by now are aware of the leaked documents from the Panamanian Law firm – Mosseck Fonseca showing how the wealthy have been hiding their riches in offshore companies, one of those being the late Ian Cameron, the father of PM David Cameron, by way of a holding or shell company called Blairmore Holdings.

There’s nothing inherently wrong with shell or holding companies; neither is there anything wrong with putting your money in one.

Legitimate reasons for doing so will be because you might have a company with intellectual property which is really international and should not be rooted in any specific country, you could be a worker who gets their salary in one country and mostly lives in another, you could be worried about the financial stability, or the threat of a government coup, in the country you’re working, and so want to keep the money elsewhere.

However, like all tax planning, loopholes can be exploited, particularly by the wealthy who can afford top notch lawyers and accountants to find those loopholes in the taxes acts.

People often blame HMRC for not “going after” these companies but the truth is, the UK government are the ones who are responsible for the content of the Finance Acts, HMRC staff merely implement it.

Here is an advertisement from an offshore set up company similar to Mosseck Fonseca:


Offshore Company Formation

To establish an offshore company and/or relocate your corporate structure to an overseas jurisdiction can be an essential step in protecting your assets from lawsuits, taking advantage of international tax breaks and growing your business overseas. This website is based on years of research and is intended as a tutorial that can guide you step-by-step in forming and using an “offshore company.” You will find literally dozens of advantages to setting up an international organization and running your business using an offshore bank account instead of, or in association with a local account. Nevis, Cayman Islands, Panama, BVI and Hong Kong are all very popular jurisdictions, and we can guide you from setting up the corporation or LLC of your choice to helping you establish a bank account for your business to establishing a virtual office offshore.

Doing business offshore is not about evading taxes or keeping money from the government. It is about structuring your affairs in such a way as to take advantage of international laws that are available to anyone who cares to use them to their benefit.

We can show you perfectly legal and legitimate ways to set up your business internationally so that you understand the far-reaching benefits from asset protection to cost-savings. You likely know that Apple, Google and a barrage of other organization have slashed their tax bills using completely legal techniques through the use of overseas structures. There are ways that you may be able to do this too, with our help plus the guidance of the proper licensed professionals.

As the Guardian newspaper points out …

Cameron Sr was one of five UK-based directors until shortly before his death in 2010. In order to avoid UK tax, his venture had to be managed and controlled from abroad. A team of six other directors from Switzerland and the Bahamas was recruited, to ensure that a majority of the board was based outside Britain. However, the paper trail suggests this was a conjuring trick, albeit one tolerated by the law. Board meetings were held every year in Nassau and Switzerland, often in the five-star Hotel Beau-Rivage in Geneva. While the Europeans regularly jetted out to the Caribbean, there is little evidence of travel in the opposite direction, raising questions about how much the Bahamas directors contributed to strategy and decision making.

For Blairmore, 2006 was an important year. It sent out a prospectus calling for new investors – clients were asked to put in a minimum of $100,000 (£70,000) each. However, the prospectus stated two of the three Bahamian board members waived their $5,000 fee that year. They were the only directors recorded as doing so.

The Guardian also goes on to say this …

In reality, according to the documents, big investment decisions appear to have been taken in the UK. Strategy was seemingly discussed in London where the investment management firm Smith & Williamson and five of the directors including Cameron were based.

Minutes from a 2001 directors’ meeting in the Bahamas say: “Mr Cameron concluded by stating that the company’s investment team … met regularly to discuss stock picks and strategy and that he was pleased with the teamwork over the past 18 months.”

Generally speaking, the only way you can avoid paying UK tax is if the company has no “presence” in the UK.

I would argue that it did.

If you click on the link below, the document provides details about the directors in relation to their place of residency, an awful lot of them (even the Smith & Williamson guys) seem to have the Bahamas as their place of residence even though they appear to work in the UK?


I think it is deeply wrong that Cameron junior appears to be refusing to comment on his late fathers involvement in this company, as this statement from Camerons’ spokesperson states;

“That is a private matter, I am focused on what the Government is doing.”

I couldn’t put it more succinctly than this twitter user …


The point is, IF UK tax should have been paid on monies going through an offshore company then it IS NOT a private matter, in fact, HMRC have a mechanism called “Managing deliberate defaulters” and as you can see from the factsheet below, the details of the “defaulter” may be published in the public domain

Compliance checks series – CC/FS14

Managing Serious Defaulters

This factsheet contains information about when we may monitor the tax affairs of people who deliberately get them wrong.

This factsheet is one of a series.

For the full list of factsheets in our compliance checks series, go to http://www.gov.uk and search ‘factsheets’.

What we mean by ‘serious defaulters’ For the purposes of the Managing Serious Defaulters’ programme, a serious defaulter is a person who meets one of the criteria listed below.

They have been:

 charged a penalty because of their deliberate behaviour

 identified, during a Civil Investigation of Fraud, as presenting a continuing high risk to HM Revenue & Customs (HMRC)

 successfully prosecuted by the Director of Revenue & Customs Prosecutions, or another prosecuting authority, for a tax matter

 charged a Civil Evasion penalty for dishonesty

 required to give, and have given, security to HMRC as a guarantee against potential future default

 successfully pursued, by an Insolvency Practitioner, for a claim on behalf of HMRC for recovery of money or assets

What we do if you are a serious defaulter

If you are a serious defaulter, as well as:

 charging you any tax, late payment interest and penalties that are due

 asking you to give us financial security if there is a high risk that you will not pay what you owe we may also decide to monitor your tax affairs more closely.

We will do this through our enhanced monitoring programme called Managing Serious Defaulters. We may also publish your details if what you did or what you failed to do was deliberate. You can find more information about this in factsheet CC/FS13, ‘Publishing details of deliberate defaulters’. Go to http://www.gov.uk and search ‘CC/FS13’.



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