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PM faces calls for offshore crackdown following Panama leak

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PM faces calls for offshore crackdown following Panama leak

Prime minister David Cameron faces growing pressure over offshore tax havens after leaked papers showed the UK was one of the biggest centres for companies involved in tax avoidance.  

The so-called Panama Papers uncovered the business relations of a law firm called Mossack Fonseca. The leak showed the firm offered services in offshore jurisdictions, including setting up companies which could be used for tax avoidance purposes.  

The UK was home to the second highest number of banks, law firms and other middlemen associated with the leaked papers, behind only Hong Kong.

Three British and Channel Island banks, HSBC, Coutts and Rothschild, were included in a list of 10 banks which supposedly submitted the most requests to Mossack Fonseca to set up offshore companies for their clients.

Cameron (pictured) himself faced difficult questions over the fact his father invested in a Bahamas based company called Blairmore Holdings.  Yesterday the prime minister said the claims were ‘a private matter’.

Crackdown calls

Today opposition leader Jeremy Corbyn will call on Cameron to lead a crackdown on tax havens, reports the Independent.

Corbyn will tell the prime minister the UK has ‘a huge responsibility’ to crack down on offshore tax avoidance. Many of the tax havens named in the documents are British overseas territories, such as the British Virgin Islands.

‘The publication of the Panama Papers this week drives home what more and more people feel - that there is one rule for the rich, and another for everyone else,’ he will say.

‘It is time to get tough on tax havens. Britain has a huge responsibility. Many of those tax havens are British overseas territories or crown dependencies.’

Treasury select committee member and Labour MP John Mann echoed his party leader’s comments and called for jurisdictions such as the British Virgin Island to be ‘thrown out of the UK’ if they did not end what he described as ‘tax evasion systems’.

Charities also backed calls for greater action on tax avoidance. Oxfam said the UK should lead the world in starting to ‘clean up the murky world of tax havens.’

Toby Quantrill, an international tax avoidance expert at Christian Aid, said the leaks showed the UK was ‘at the very heart of this rotten system’ of offshore tax firms.

A spokesman for Cameron said the prime minister had placed tax avoidance at the front of the UK's presidency of the influential G8 group of countries.

'We have been taking action to crack down on offshore evasion. It was the prime minister that put this front and centre of our G8 presidency and led global efforts to improve action on tax and transparency,' he said.

Cameron is due to host a conference on international efforts to stop tax avoidance in May.

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