Letter from Geoff Cook, Chief Executive, Jersey Finance to The Guardian – in response to article ‘Crown Dependencies: The Loophole Islands’

Dear Sir,

In headlining your editorial ‘Crown Dependencies: The Loophole Islands’ (29th June 2012) you reveal that you have fundamentally failed to understand the true nature of Jersey’s finance industry. Such a prominent misrepresentation cannot go unchallenged.

There has, over the last week or so, been a frequent conflation of the terms ‘tax avoidance’ and ‘tax evasion’.  The latter is the illegal concealment of taxable activity. It is a criminal offence in Jersey and the island has no need or desire to engage in schemes designed to help companies or individuals evade UK tax.

As the Guardian does implicitly concede, ‘tax avoidance’ is more complicated. It can mean no more than legally minimising the tax you have to pay.  This is something that many individuals and companies (including Guardian Media Group) seek to do legitimately. It could even be used to refer to such accepted schemes as ISAs. 

For the record, Jersey will accommodate legally-planned tax schemes.  If these schemes are challenged by HMRC and deemed to be illegal, Jersey will not house them. If an elected British government disagrees with the propriety of the schemes, it should ensure that the law is amended to make them illegal. 

Tax planning of this type is actually a very small part of Jersey’s overall finance industry and you choose to ignore that much the greater part of Jersey’s activity is actually focussed on the pooling and structuring of international funds that have already been taxed.  Jersey has been successful as an international finance centre because it is a stable, well regulated jurisdiction with experience and skills which enable it to compete with other onshore and offshore locations around the world.

Your readers should be aware that in abusing Jersey with the term “Loophole” you are performing a gross disservice to its hardworking people. Moreover, your assertions ignore major academic studies by numerous highly respected institutions which evidence empirically that small international finance centres such as Jersey are in fact accelerators of global economic activity. Far from detracting from major economies, there is clear evidence that they provide a significant net benefit.

Yours faithfully,

Geoff Cook

Chief Executive