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Third of firms getting emergency coronavirus loans have tax haven links – study

Harriet Line, PA Deputy Political Editor
·3-min read

Nearly a third of companies in receipt of coronavirus loans from the Bank of England have links to tax havens, new research has suggested.

Analysis by TaxWatch, an investigative think tank, claimed 14 out of the 53 businesses which have benefited from help are either based in or substantially owned by a tax haven resident.

They have received more than £5 billion in loans as part of the coronavirus corporate financing facility (CCFF) – a Bank of England scheme designed for some of the biggest companies with credit ratings.

Among recipients of the scheme are British Airways, whose parent company is based in Spain and the UK, but has financial links to Jersey. It has accessed £300 million of support.

Digger-making JCB, whose parent company is located in the Netherlands, and fashion brand Chanel, whose parent company is based in the Cayman Islands, have both won loans of £600 million.

TaxWatch said one company receiving a loan is under investigation by the Serious Fraud Office while another is nine months late in filing its UK accounts.

George Turner, the think tank’s UK director, said: “The fact that UK taxpayers’ money is being used to make substantial loans to companies that have not filed proper accounts, are currently under investigation for bribery and corruption or are part of some tax avoidance structure demonstrates the lack of any meaningful conditions around government support for business.

“The publication of the Bank of England list reveals only a fraction of the businesses receiving Government support. Given the issues arising from just this very small group of companies, there really is a compelling argument for the Government to publish the names of all companies receiving taxpayer support.

“This is taxpayers’ money. It is right that taxpayers know who they are providing support to and demand high standards of financial and tax conduct.”

A Treasury spokesman said: “We have acted at unprecedented speed to support jobs and the economy. The Covid Corporate Financing Facility directly protects hundreds of thousands of jobs, supports some of our biggest companies’ cashflows and enables them to support their suppliers.

“We continue to be at the forefront of global action to tackle tax avoidance, with a series of robust measures in place to tackle profit shifting arrangements.

“That is the right way to challenge rule-breaking, rather than punishing British workers who pay their taxes by denying access to measures that support the British economy.”

The analysis comes after calls for the Government to deny coronavirus loans to companies deemed risky by HMRC.

Labour’s Dame Margaret Hodge, a former chairwoman of the Public Accounts Committee, said those who do not pay their fair share in the good times should not be bailed out by the taxpayer when the going gets tough.

In a letter to the Chancellor, she said: “I am deeply concerned, however, that the support packages offered by the Government during the crisis are open to abuse.

“While for many these schemes will be a financial lifeline, for unscrupulous corporations they will be viewed as easy pickings.”