Jeremy Corbyn has suggested direct rule over the British Virgin Islands and other UK secrecy jurisdictions. But this is just one of David Cameron’s options

1) Create registers showing beneficial owners of companies

From June, all UK companies will have to declare their beneficial or “significant” owner in a new register. The reform follows pledges by David Cameron to introduce greater transparency and to crack down on tax evasion. However, many of the firms that own property anonymously in the UK, especially in London, are registered offshore. UK overseas territories such as the British Virgin Islands are resisting government pressure to introduce a similar public register. The government can compel Britain’s island tax havens to follow suit.

2) Make those registers public

Even if tax havens such as the BVI are forced to create registers of beneficial (ie the real) owners, these would be of no use if hidden from public view. Ensuring such registers were publicly available and online would allow campaigners, journalists, tax officials and fraud investigators to assess who controlled an offshore company. In a discussion paper published last month, the government left open the option that these registers could be kept by tax havens – in effect meaning they would be unpublished. This would allow offshore secrecy to continue.



The Panama Papers: how the world’s rich and famous hide their money offshore Read more

3) If necessary, impose direct rule on Britain’s overseas tax havens

If the BVI and other UK territories resist this proposal, the government has the option of imposing direct rule. This is a less extraordinary measure than it seems. In 2009 the UK suspended the ministerial government and assembly in the Turks and Caicos after allegations of corruption and administrative incompetence. The governor appointed by the UK took charge for two years. The Labour party leader, Jeremy Corbyn, and the former business secretary Vince Cable argue that Cameron should consider this option. Corbyn said: “If the local government in the area is going to condone tax avoidance and tax evasion that’s something that has to be considered.”

4) Mandatory filing of accounts

Companies in countries such as the UK have to publish detailed accounts once a year. Offshore companies are under no obligation to file accounts, let alone publish them. This creates an obvious opportunity for money-launderers and others to hide their assets. Public accounts would make this more difficult. More than half of the companies in the Panama Papers are registered in UK-governed tax havens or overseas territories.

5) Ban sham directors and shareholders

Thousands of the companies exposed by the Panama Papers have fake or “nominee” directors. These are typically people with no connection whatsoever to the companies they are supposedly running. Nominee directors allow the real people who own offshore companies to remain invisible. A better system would be to identify publicly the real shareholders in an offshore firm. The government could make a start by doing this in the UK and in crown dependency tax havens such as Guernsey, Jersey and the Isle of Man.