BBC accuses Sark firm of tax avoidance over supply teachers

A SARK company that employs thousands of teachers has avoided paying millions of pounds in employer’s National Insurance contributions, a BBC programme has claimed.

A SARK company that employs thousands of teachers has avoided paying millions of pounds in employer’s National Insurance contributions, a BBC programme has claimed.

And with the amount of national interest the story has attracted, it could have an indirect impact on Guernsey, the Treasury and Resources minister said yesterday.

Speaking yesterday after the story broke online, Treasury and Resources minister Deputy Gavin St Pier, pictured, said: ‘I think like the K2 in Jersey [the tax scheme used by comedian Jimmy Carr and others], anything which happens in any of the Channel Islands has an indirect impact on all of the other islands.

‘All I can say is I don’t know the full details of this case, but it’s up to other jurisdictions to operate a tax system in whatever way they see fit, providing the law is not broken,’ he said.

Sark’s Finance and Commerce Committee members Sandra Williams and Charles Maitland declined to comment on the basis that they did not know the full details of the matter.

Comments for: "BBC accuses Sark firm of tax avoidance over supply teachers"

Watcher

Here we go again ! Yet another potentially grubby business based in the Channel Islands, it is little wonder that the UK views us with such suspicion. As this "business" is apparently based in Sark maybe the Sark authorities should kick it firmly into touch - or maybe they are too busy with the great grape saga. Time to join the 21st century Sark.

SaintsBay

Wait until HMRC go after the companies set up here that perform the same services on behalf of cruise ships,private security companies (mercenaries), oils rigs.

Runs into may millions of tax that the UK exchequer will eventually come for and one can anticipate already more bad headlines for the Channel Islands.

LVCR all over again.

Doug

If the work is not being carried out within the UK then it is not normally taxable in the UK so cruise ships, overseas security etc.. would not be of interest to HMRC.

Gilthead

Wrong - most if not all of the schemes you mention have been sanctioned by HMRC.

And it doesn't take a genius to work out that this scheme is revenue neutral.

A point missed by Murphy not surprisingly.

Ray

Surely the real story is that the UK's tax system is so full of gaping loopholes that they are virtually throwing away tax income to any jurisdiction in the world able and willing to legally exploit those loopholes

Tighten up your laws UK or risk the BBC making a proper investigation ( or perhaps not because some BBC staff are allegedly playing the same game)

All aboard the skylark!!

And who said the Sark Lark was dead???

I wonder if Delaney will have anything to say about this, I guess he can't say too much bearing in mind John Donnelly is his assistant editor or whatever.

PB Falla

Another guernsey shambles

Who needs to close the borders when the criminals are within

blondie

What's the betting their bankers turn a blind eye to something with potential reputational risk, because of the income generated by a transactional business.

Gsyman

The headline says a Sark company; can a limited liability company be incorporated in Sark?

GM

Gsyman

No - Sark does not have a company law. Its almost certainly a BVI or Panamanian company "run" from Sark. Should be easy enough to conclude that it's a "sham" - what sort of substance does it have in Sark other than a PO Box address? Real staff doing real admin? Real directors making real decisions? Why on earth would anybody choose Sark as a place from where to run a proper business?

As is mentioned by other posters, these sorts of companies are easy to set up in full accordance with HMRC obligations, with nothing illegal going on, but still, why to "run" it from Sark? Many are set up where either the staff are from abroad and are being hired to UK companies, or where the staff are from the UK and being hired for jobs abroad.

Its not really a story at all, apart from the Sark role in it.

local

Your right that its not really a story as this business is approved by HMRC however, there are real people operating a real business on the Avenue here in Sark.

The business offers local employment to local Sark residents and is a valid business model.

I am not involved in it in any way but its always worth checking the facts eh.

GM

Local

Next you'll be trying to tell us that the directors in Sark exercise genuine management and control there, and are not actually mere puppets of the real decision makers elsewhere.

I've seen too much of the Sark directorships facade over the years to be fooled by that. I can't see HMRC being fooled by it either. Having a mere administration office offshore is nowhere near enough. The key factor to successfully claim offshore corporate residency is where the company's central mind and management is exercised from. Yes - it is not totally impossible for this to be from Sark, but for an active trading company of that scale it seems most unlikely.

Little Englander

Another seedy tax scam attributable to the Channel Islands.

Pete

The Global finanical system has become rotten through the emergence of offshore finance. This scheme is only one of an infinate number that has been set up world wide to avoid paying tax.

Compared with what is on offer in the USA the Channel Islands are only small players in the global network of offshore jurisdictions offering tax avoidance facilities. Though in the case of Jersey this may not be so as it has a long standing history in these practices.

Alan

ISS appears to have been incorporated in Jersey in 2002, and its registered address is in Jersey according to JFSC Companies Register. Company Number 84559. Changes of registered address in 2010, but its still showing as Jersey Its contracted admin company from Channel 5 appears to be in London.

Why is its web site saying its address is Sark, when its registered address is Jersey

GM

Alan

A very good question indeed. Why would anybody try to claim that any business of any alleged substance is "run" from Sark?

Looks rather like the real work is done by the contracted admin operation in London, and that the contracts are simply "booked" in Sark so that the profits are alleged to arise there. What exactly do the directors in Sark do? Should be very easy for HMRC to quickly prove that there is insufficient "central mind and management" in Sark and that its really run from the UK, which completely negates the tax planning, although possibly not the NIC planning.

This "scheme" using Sark looks like a throwback to the 80s.

Alan

Ooooops wrong ISS. The ISS registered in Jersey, nothing at all to do with the ISS referred to on Channel 5 programme which is Intelligent Salary Services, which does not appear to be a registered company in either Jersey or the UK whose office is listed as in Sark.

Sincere apologies to all for my mistake

Alan

Ooops the Guernsey Press has proved me wrong again.See "Sark based company is compliant".

ISS (Intelligent Salary Services) web site address in Sark but not registered in Guernsey or Jersey is the Jersey registered company

"However, Mr Harker said ISS – International Subcontracting Solutions Ltd – was a legal HM Revenue and Customs-compliant business."

Anyone for an aspirin?

Realist

I have no doubt the scheme was legal and compliant with UK tax legisaltion - as are almost all of the diverse schemes run out of Guernsey.

The onus is certainly on onshore jurisdictions to tighten up thier own tax laws to prohibit these sorts of activities.

Trouble is they are doing exactly that.

The UK, USA and a lot of European countries are looking long and hard at aggressive tax planning strategies and they have already started closing the loopholes (e.g. QROPS, LVCR, UK disguised remuneration laws the new French tax on trusts etc. etc.). Expect a lot more of that sort of action.

Whether or not one disapproves of the morality of tax avoidance planning is irrelevant. The fact is, it is going to get harder and harder to conduct this sort of business.

Guernsey really needs to start looking for ways to diversify its economy urgently because we have too many eggs in this particular basket at the moment.

Beanjar

I don't know why we in the Channel Islands get guilt pangs over this. If UK taxation was not so complex there would not be so many loopholes for clever lawyers and accountants to exploit. It is pretty rich to be criticized from the UK anyway - jurisdiction of convenience for half the scallywags in the World. If you earn enough you just agree an amount of tax that everybody is happy with. And if you get caught for non payment of tax those who owe thousands might end up inside but if you owe millions the taxman settles for getting some of it back. Its the same the whole world over, only the mugs without the millions pay their full whack of tax.