Former Banbury and Bicester MP Sir Tony Baldry has flatly denied any wrongdoing over his involvement in companies registered in an offshore tax haven.
Sir Tony is one of three former Conservative MPs, six members of the House of Lords and dozens of party donors named in the ‘Panama Papers’ which have created a furore over tax dodging.
Chipping Norton MP and Prime Minister, David Cameron, refused to comment on details of his father’s accrual of wealth using offshore shares devices over 30 years, calling it ‘private’.
The storm broke after a 400-strong team of investigative journalists released details of individuals’ involvement in companies registered in British overseas territories, such as the British Virgin Islands, and crown dependencies such as the Channel Islands and the Isle of Man.
The documents reveal vast use of offshore tax havens as a means of legally avoiding tax.
Sir Tony said: “I can state categorically that I have not at any time sought to avoid paying UK tax on any of my earnings (and have never had an offshore bank account).”
Sir Tony was a director of Westminster Oil Ltd and its wholly-owned subsidiary Westminster Caspian from 2007 to 2012. The company was set up to undertake oil exploration and recovery in Kazakhstan but its projects did not materialise and the company became dormant.
He said the company was registered in the British Virgin Islands because the shareholders and directors came from different countries including the UK, USA and Kazakhstan and would never have been liable for UK tax.
“I received director’s fees, reported to HMRC in my annual tax returns and tax paid on them. My directorship was clearly entered in the Register of Members’ Interests in the House of Commons.
“Westminster Caspian was not separately entered because it was a wholly-owned subsidiary and did not have to be recorded under the rules of registration.
“I have, however, been involved over the years with several international companies not registered in the UK for the reason that they were not trading in or with the UK but in other jurisdictions.”
Labour’s election candidate for Banbury last year Sean Woodcock said he supported Jeremy Corbyn’s demand for an independent inquiry into all Britons named in the documents.
He said David Cameron should stop ‘pussyfooting around’ and get tough on tax havens. Having one set of rules for the wealthy elite and another for the rest is wrong and the richest must pay their way, he said.
“There may well be perfectly legitimate business reasons for investing money with a firm in Panama that have absolutely nothing to do with trying to avoid paying tax or covering up where you made your money. But I can’t think of any,” said Mr Woodcock.
“It is absolutely right that businesses and individuals try to make money.That is how economies grow. Equally it is perfectly natural that these same groups make decisions around where they invest their money with tax in mind. That’s why we have ISAs.
“There seems to be a culture inherent within a small group of people at the very top which goes beyond strategic decision-making or being frugal to outright deception, greed and dishonesty. This is a symptom of that.”
The Panama Papers are 11.5m documents leaked from secretive Panama law firm Mossack Fonseca. They explain how it helped clients dodge taxes and international sanctions. It emerged that half the companies were incorporated in the British Virgin Islands.
After Hong Kong, Britain was top of the list of international countries where banks, law firms and other middlemen associated with the Panama Papers operate.
In 2011, Mr Cameron highlighted a need to ‘shine a spotlight on who owns what and where the money is really flowing’ but little has been done since then.
In his speech to the 2013 G8 summit Mr Cameron said: “The extraordinary thing about this tax, transparency and trade agenda is that it’s not just the right thing for us to do morally it’s right for our economies too. Because when some businesses don’t pay their taxes, it corrodes public trust.”
And he promised to fight ‘the scourge of tax evasion and aggressive tax avoidance’.
Sir Tony stepped down at the 2015 General Election after 33 years as Banbury and Bicester MP,