- More than 20,000 companies being run by only a few dozen people, BBC Panorama finds
- Individuals are being paid to front businesses in tax havens they have nothing to do with – an illegal act in the UK
- Probe films brokers admitting more chance of winning the lottery than being caught by HMRC
- Another man says about tax evasion ‘we wouldn’t give a monkeys’
A web of tens of thousands of bogus companies set up in Britain and fronted by sham directors dotted around the globe is helping aggressive tax evaders and criminals keep millions, an investigation revealed today.
An undercover BBC probe has exposed the illegal scam after they secretly filmed brokers bragging they had more chance of ‘winning the lottery’ than being caught by HM Revenue and Customs.
Tonight’s Panorama lays bare a network of at least 21,000 of these companies, headed by just a few dozen puppet managers in various obscure countries who are paid just to front the tax fiddle.
Many of these ‘corporate service providers’ are based in the UK – and are willing to set up tax evasion schemes and sometimes allow money laundering of criminal funds.
Behind the scenes these brokers are controlling the investments, and cleaning dirty money or hiding assets from the UK tax man.
James Turner of Turner Little in York, said on film he had 10,000 of these set up and HMRC had ‘never got to the money’.
Admitting that they were fronted by nominee directors he said: ‘They won’t even know that they are a director, they just get paid,’ adding that these individuals just sign off documents and send it back in the post.
The BBC also filmed Russell Lebe, Managing Director of Readymade Companies Worldwide, who was willing to invest money via India.
He said if the authorities got in contact about potential tax evasion ‘we wouldn’t give a monkeys’.
One undercover reporter approached a broker and said he had £6million of undeclared cash in Switzerland, and was told to siphon it through Belize, which would be controlled in secret behind one of these puppet directors.
Jesse Hester, from Atlas Corporate Services, is filmed saying: ‘Tax authorities don’t have the resources to chase everybody down. They reckon it’s probably the same rough odds as probably winning the lottery’.
The fake directors they use nearly always live in far-flung places and only pretend to control the businesses, an illegal act that the UK Government said they had crushed decades ago.
These arrangements, found by the BBC in a joint sting with the Guardian and the Washington-based International Consortium of Investigative Journalists, make sure it is sufficiently complicated to ensure HMRC struggle to trace the cash and allows rich individuals to conceal their assets.
Nominee directors are not illegal as long as they are involved in the running of the business and know what the company is doing. Therefore these sham managers are not allowed.
Conspiracy: Expert Jonathan Fisher QC said if the system is being used in this way then it is clearly criminal
White collar crime expert Jonathan Fisher QC said the system breaks the law.
‘If this proceeded and the company was set up and it was set up in the way in which it is being discussed, then plainly some very serious criminal offences would be committed,’ he said.
After the sting James Turner denied any wrongdoing and Turner Little said it takes its responsibilities seriously, launching an internal investigation.
The controversial evasion technique became famous in the 1990s when it was used in the Channel Islands – known as the ‘Sark Lark – before it was stamped out by the then Tory government.
One person was found to be the directors of at least 1,300 companies and the 600 people who lived there held 15,000 directorships.
This has all but disappeared on the island after the law was changed but now it appears that it has returned in strength around the globe.
Former Met Police Detective Superintendent Tristram Hicks, an expert on money laundering, said: ‘What I’m shocked by, and concerned by, is the apparent ease with which you’ve discovered these people.’
HMRC say that most of these 2,000-plus corporate service providers operate legally but admitted that they have never prosecuted anyone for setting up a system to help evade tax or launder money in this way.