Kuits’ Executive Partner appears on BBC Breakfast to weigh-in on Panama Papers06 Apr 2016
Robert Levy, Kuits’ Executive Partner and specialist tax investigations solicitor, featured live on BBC Breakfast on Tuesday 5th April, following the Panama Papers scandal.
Joining presenter Dan Walker on the red sofa, Robert explained why so many have chosen Panama as a destination to hide assets – because of the “secrecy” it offers – and why moving assets out of Panama to a different offshore destination is not a long-term option, as the world eventually moves towards global transparency. He also discussed what the UK government is doing to tackle tax evasion by UK taxpayers and what more needs to be done.
Robert advised that anyone who has done business through Panama needs to take swift legal advice: “If people have been putting assets there and simply relying on the fact that a spotlight won’t be shone on those assets, then they’ve been taking a risk.
“Their structures […] may have been legitimate and may now no longer be because of a change in law. But certainly, if somebody has done something wrong, they need to get to the Revenue before the Revenue get to them.”
The Panama Papers scandal is the biggest data breach in history, with the leak of 11.5 million documents from the database of Panama-based law firm, Mossack Fonseca. The files reveal the ways in which the rich have exploited secretive offshore tax regimes, with more than half of the companies registered in British-administered tax jurisdictions. Hundreds of reporters in almost 80 countries around the world worked on the documents’ release for over a year.
See the transcript of the full interview below.
BBC Breakfast’s Dan Walker (DW): Robert Levy is a tax investigations solicitor from Kuits in Manchester, he’s advised clients who have been investigated for their financial dealings. Good morning to you, Robert, thanks so much for coming on the sofa. Why Panama, what is attractive about Panama?
Robert Levy (RL): I think Panama has become attractive for secrecy, [the] ease of setting up companies, ease of managing companies, and finding professional advisors who can effectively run the companies the way you want them to be run.
DW: Are you surprised by the scale of these revelations? There [are] millions of emails but there’s a number of world leaders – 12 world leaders, either current or former world leaders, involved in this as well – and a number of other people.
RL: Yeah, I’m not surprised at all. You know, this is the third time now [we’ve seen] a dump of data for one reason or another – either data theft or whistleblowing – and this is becoming a new norm. And I’m not surprised at all that people have used Panama to shelter assets or structures.
DW: We should say though that Mossack Fonseca – the company at the heart of this – they say they’ve done nothing wrong and they are operating within financial rules. And that’s something important from their perspective, and for us to deal with in balancing the story, isn’t it?
RL: Very important. And [it’s] not only Mossack Fonseca [that] may have done nothing wrong, but actually, a large number of the people who have used structures from Mossack Fonseca may have done nothing wrong. But wrapped up in there, there will almost certainly be people who have done something wrong, and that’s what HMRC will be focusing on.
DW: Does this come down to the old classic – the difference between avoidance and evasion?
RL: Yes, partly. What I think is important to know is that, where something – to work from a tax point of view – is fully dependent on secrecy, the chances are that it’s not an open structure. So if people have been putting assets there, simply relying on the fact that a spotlight won’t be shone on those assets, then they’ve been taking a risk. And unfortunately, it looks like that risk has now come in.
DW: From a personal point of view, there’s all sorts of question marks over David Cameron and you know, lots of front pages of the papers are using on the link between him and his late father as well. But what more can the UK government do, do you think to make sure that the money that is in offshore accounts is taxable, and we know where that money is?
RL: Well first of all the UK government, I think, has done a great deal in this area. Now people may argue it’s not done enough – people will certainly argue there’s more to be done. But the UK government has been very innovative. It’s introduced new penalties, it’s introduced new regulations, which have effectively closed off a number of jurisdictions – like Lichtenstein for example, which was extremely secretive and has now joined…the move to bank transparency. But there’s more to be done and the biggest issue for the government is getting other territories to join in. It has to be a global effort because otherwise you will always have outliers, and in a global economy, the money will flow to the outlying jurisdictions.
DW: What would be your advice to somebody watching this, or a client of yours, who have been involved in this in some way?
RL: I think that if anybody has had dealings in Panama, certainly if anyone believes that they may have dealt with Mossack Fonseca, I think they need to take advice quickly. Because even if their structures are legitimate, first of all they may have been legitimate and may now no longer be because of a change of law, but certainly, if somebody has done something wrong, they need to get to the Revenue before the Revenue get to them.
DW: And I suppose one final point as well Robert, is if Panama is currently the focus of all this attention, won’t the – to protect money or to hide it if that’s what this is – won’t they just move it somewhere else if that’s the case?
RL: Very probably. But the strategy of the government, and of HMRC in particular, has very much been a strategy of no safe havens. So the principle behind it is that there should eventually be nowhere that you can move your money to secretly that you will be prepared to keep your money. So you may move it to a jurisdiction that will keep it secret for you, but if that’s not safe for any number of other reasons, you wouldn’t do it.
DW: Robert, that’s fascinating, thank you very much for joining us this morning.