0:00:02 > 0:00:07Tonight on Panorama: More revelations from the leak that's
0:00:07 > 0:00:11shocking the world, the Paradise Papers. What do you to our viewers
0:00:11 > 0:00:17who pay their tax? The secrets of the rich and wealthy laid bare.I
0:00:17 > 0:00:20don't know how they haven't been caught yet. Maybe after this
0:00:20 > 0:00:25programme they will be.The Paradise Papers show how Britain's off shore
0:00:25 > 0:00:32empire helps the rich and powerful dodge tax. You have an
0:00:32 > 0:00:36non-transparent systemWe do not have a non-transparent system.I
0:00:36 > 0:00:42can't see it.You don't count.How we're all losing out because of it.
0:00:42 > 0:00:45Every time they close a school in your neighbourhood. Every time they
0:00:45 > 0:00:51have to close a hospital, a lot of that happens because rich
0:00:51 > 0:00:54individuals and corporations are not paying their fair share of the costs
0:00:54 > 0:01:02of society.We expose the British tax havens happy to help people beat
0:01:02 > 0:01:06the taxman. Will you apologise, if a law was changed here to help tax
0:01:06 > 0:01:11dodgers?If that has happened as you're stating, yes, I will
0:01:11 > 0:01:16apologise.We've found a new tax dodge used by the world's most
0:01:16 > 0:01:20profitable company.You can see them as this fantastically innovative IT
0:01:20 > 0:01:26company but you can also see them as a fantastically innovative tax
0:01:26 > 0:01:30dodger.We confront the millionaires hiding their wealth offshore. Were
0:01:30 > 0:01:36you dodging tax? And the internationally famous comedian who
0:01:36 > 0:01:40told Panorama to (BLEEP) off. After we found that actors on his show
0:01:40 > 0:01:49were dodging tax. Can you tell me about your taxes, you get paid in
0:01:49 > 0:01:57Mauritius, what's all that about?
0:02:08 > 0:02:16It was a big summer in Bermuda, the world's most prestigious yachting
0:02:16 > 0:02:24race, the America's Cup came to the islands. One of the sponsors is now
0:02:24 > 0:02:34at the centre of one of the biggest data leaks in history, Appleby. When
0:02:34 > 0:02:38awe rife, one of the world's most prestigious sporting events, you're
0:02:38 > 0:02:42greeted with an array of flags of all the sponsors of the right in the
0:02:42 > 0:02:50middle is Appleby. This event is not mass market. This is a high end
0:02:50 > 0:02:58event. People here are, the sponsored are elite and working
0:02:58 > 0:03:08companies, in the middle of them is Appleby. Appleby is one of the most
0:03:08 > 0:03:14successful off-shore firms in the world. And the America's Cup
0:03:14 > 0:03:21attracts the sort of wealthy clients it works with. New Zealand have won,
0:03:21 > 0:03:27I think.
0:03:31 > 0:03:40While we are in Bermuda, we have to keep our investigations secret.
0:03:40 > 0:03:45We're here because almost seven million documents have been leaked
0:03:45 > 0:04:02from Appleby. We can now see what they and their clients do. You have
0:04:02 > 0:04:08to be very careful at this stage of the investigation. Because Appleby
0:04:08 > 0:04:16don't know that we have their data.
0:04:22 > 0:04:28Appleby's documents were obtained by the German newspaper, they've been
0:04:28 > 0:04:32shared with the international consortium of investigative
0:04:32 > 0:04:37journalists, including Panorama and the Guardian newspaper. The
0:04:37 > 0:04:39revelations from the Paradise Papers have already sent shock waves around
0:04:39 > 0:04:57the world. We've revealed the Queen's off-shore investments. How a
0:04:57 > 0:05:02former Tory treasurer could face a tax bill of tens of millions after
0:05:02 > 0:05:06ignoring financial rules. And the questions for the Premier League
0:05:06 > 0:05:14about the billionaire and his links to two of Britain's biggest clubs.
0:05:14 > 0:05:21But there is much more in the documents. Tonight, we uncover some
0:05:21 > 0:05:30of the secrets of Britain's off-shore empire.
0:05:40 > 0:05:47This is the Isle of Man, we're here to investigate a multimillion pound
0:05:47 > 0:05:51tax dodge that attracts the rich and famous from around the world am --
0:05:51 > 0:06:02world. The Isle of Man is a Crown dependency, the UK Government is
0:06:02 > 0:06:05ultimately responsible, but this island can provide a special
0:06:05 > 0:06:10service. This is the place to come if you want to dodge tax on your
0:06:10 > 0:06:18luxury jet.All these different tax havens in the world, they carve out
0:06:18 > 0:06:23a niche for themselves. There's so many things they can specialise in.
0:06:23 > 0:06:28Being the jurisdiction of choice to register a jet. To register a yacht
0:06:28 > 0:06:32or family business. That's how they're competing. It's part of what
0:06:32 > 0:06:37makes off shore so complicated. There are almost a thousand private
0:06:37 > 0:06:44jets registered here. When you or I buy most goods, we have to pay 20%
0:06:44 > 0:06:49VAT. But here on the Isle of Man, they're going out of their way to
0:06:49 > 0:07:03help the super rich dodge that tax on their luxury planes. Take four
0:07:03 > 0:07:12times world champion Lewis Hamilton. In 2013, he made a dream purchase.
0:07:12 > 0:07:17This is your plane.If I get a plane I'm going to pimp it out.Paint it
0:07:17 > 0:07:24red, yeah.Exactly.It was handy for his jet set life style and obviously
0:07:24 > 0:07:31to visit his then girlfriend, pop star Nicole Scherzinger.He's the
0:07:31 > 0:07:45best in the world, so I trust him. It cost £16 million. That meant a 3.
0:07:45 > 0:07:55£3.3 million VAT bill. And that's where the Isle of Man comes in. This
0:07:55 > 0:08:02is how the tax dodge worked. The jet is owned by Lewis Hamilton's company
0:08:02 > 0:08:09in the Caribbean. It leases the jet to a new company, owned by Lewis
0:08:09 > 0:08:15Hamilton in the Isle of Man. So that's Lewis Hamilton renting his
0:08:15 > 0:08:20own jet to himself. Then it's leased it a leasing company, he doesn't
0:08:20 > 0:08:25own, that provides a crew and maintenance. They then lease it back
0:08:25 > 0:08:33to Mr Hamilton, that's him renting his own jet back. Hey presto, a 3.
0:08:33 > 0:08:40£3.3 million VAT refund.It's the artificiality of the scheme that
0:08:40 > 0:08:44should raise suspicions. From the moment that you see the
0:08:44 > 0:08:48artificiality of it, you should ask questions about what is the
0:08:48 > 0:08:51motivation in this particular case. Questions would be raised on whether
0:08:51 > 0:08:56this is indeed a proper business for VAT purposes, in which case refund
0:08:56 > 0:09:07should not have been granted.
0:09:08 > 0:09:12Lewis Hamilton's lawyers told us he had a set of professionals in place
0:09:12 > 0:09:20who run most aspects of his business operations. And they said, Isle of
0:09:20 > 0:09:28Man customs gave informed approval to the scheme. But we don't think
0:09:28 > 0:09:32that his deal complies with EU and UK tax rules. It's because of the
0:09:32 > 0:09:40personal use. To get his tax dodge, Lewis Hamilton had to fly his jet
0:09:40 > 0:09:46here to the Isle of Man just once. He came here in 2012, with his then
0:09:46 > 0:09:51girlfriend. Our documents show that Customs and Excise here were happy
0:09:51 > 0:10:05to come in at 6am to sign off on the VAT deal. Lewis Hamilton's lawyers
0:10:05 > 0:10:09told us the structures were not unlawful and do not constitute
0:10:09 > 0:10:19abusive practice. The VAT rules about the business use of jets are
0:10:19 > 0:10:26incredibly complicated. But if you use your plane for fun, you have to
0:10:26 > 0:10:33pay VAT.I can't believe I have my own plane still, after all these
0:10:33 > 0:10:40years.Well, look at this post - Lewis Hamilton is quite open that
0:10:40 > 0:10:46his jet is being used for fun. Now even though it's mostly used for
0:10:46 > 0:10:55business, he shouldn't have got a full refund.If they're using it for
0:10:55 > 0:10:59private purposes, the fact that all this money is being refunded is
0:10:59 > 0:11:03quite shocking. You should not be getting VAT back if it's private
0:11:03 > 0:11:15usage and you're getting VAT back. We have found 50 schemes like Lewis
0:11:15 > 0:11:23Hamilton's in the documents. We've seen millions being handed out in
0:11:23 > 0:11:26VAT refunds to oligarchs and sports stars, who are clearly going to use
0:11:26 > 0:11:29their jets for private use. How on earth can that possibly be allowed
0:11:29 > 0:11:38to happen?We only accept cases for the refund of VAT on jets if it's
0:11:38 > 0:11:42for 100% business use.We have seen cases where it's clearly going to be
0:11:42 > 0:11:47used privately.I look forward to you providing me with that evidence.
0:11:47 > 0:11:52Well, here's the evidence. Our documents show Isle of Man customs
0:11:52 > 0:12:01knew that jets were being used for personal use. And customs have since
0:12:01 > 0:12:05confirmed, as long as it was predominantly business use, they
0:12:05 > 0:12:12gave refunds any way. We've discovered that Appleby's office on
0:12:12 > 0:12:19the Isle of Man has imported luxury jets worth 1. £1.25 billion, so some
0:12:19 > 0:12:23of the wealthiest people on the planet have avoided a small fortune
0:12:23 > 0:12:37in tax. In total, the Isle of Man has handed out more than £790
0:12:37 > 0:12:46million in VAT refunds to jet leasing companies. As a result of
0:12:46 > 0:12:50Panorama's investigation, it's now called in the British Government to
0:12:50 > 0:12:58review its procedures. They're approved on the Isle of Man.VAT
0:12:58 > 0:13:02rules and regulations on corporate jets are highly complex. I genuinely
0:13:02 > 0:13:05feel that you have missed the point. We are concerned about your
0:13:05 > 0:13:08allegations, so we've said right, what's the best thing to do to show
0:13:08 > 0:13:14we have nothing to hide, we're an honest and transparent jurisdiction
0:13:14 > 0:13:19- let's ask HM treasury will they come in, review, assess I should
0:13:19 > 0:13:24say, our practice of importation of business jets into the EU via the
0:13:24 > 0:13:34Isle of Man and let's see what they've got to say.The British
0:13:34 > 0:13:44Government declined to be interviewed for this programme. But
0:13:44 > 0:13:48one of the revelations of the Paradise Papers is the role this
0:13:48 > 0:13:53country plays in an industry that hides hundreds of billions off
0:13:53 > 0:14:00shore. Appleby has offices in tax havens around the world. Most have
0:14:00 > 0:14:06links to Britain.The UK has a kind of network of tax havens around the
0:14:06 > 0:14:11world that are partly British, like the overseas territories, Cayman
0:14:11 > 0:14:15Islands and so on, and the Crown dependencies. You could say this is
0:14:15 > 0:14:21like a second financial empire, second empire of Britain. These
0:14:21 > 0:14:24places are effectively jurisdictions for sale. They will do what it
0:14:24 > 0:14:32takes.
0:14:32 > 0:14:36The Isle of Man became a tax haven in the 1980s when farming and
0:14:36 > 0:14:44tourism declined.It does not seem ethical to my mind and it does not
0:14:44 > 0:14:49seem healthy and sustainable in the long rant and it will nibble away at
0:14:49 > 0:14:58the island's reputation.A third of the island's economy is financial
0:14:58 > 0:15:06services.You can see that around as there are signs for HSBC and
0:15:06 > 0:15:15Barclays Bank down there. Athol Street here, you have got Appleby, a
0:15:15 > 0:15:20big legal firm, a big player. And very close to all this
0:15:20 > 0:15:25geographically and hand in glove with the offshore finance industry
0:15:25 > 0:15:32is the government here.This close relationship is what tax havens
0:15:32 > 0:15:39offer.They can influence the politicians, and very often they
0:15:39 > 0:15:43will just write the laws at themselves and presented to these
0:15:43 > 0:15:48tax havens and say, please, put this in your legislation, which is
0:15:48 > 0:15:53profoundly dangerous for other countries that are affected by this.
0:15:53 > 0:15:57And there is an example in the Paradise Papers of how unhealthy
0:15:57 > 0:16:04this relationship can be. We have found evidence that shows just how
0:16:04 > 0:16:08far the Isle of Man government has been prepared to go to help tax
0:16:08 > 0:16:20dodgers. It is all about a law that was aimed at stopping tax evaders.
0:16:20 > 0:16:28The most serious tax dodgers who break the law. The European savings
0:16:28 > 0:16:32directive meant if you had your money in a bag anywhere in Europe it
0:16:32 > 0:16:40would be taxed.The European savings directive was intended to put a stop
0:16:40 > 0:16:49to some forms of cross-border tax evasion.In our documents there is a
0:16:49 > 0:16:53scheme designed to undermine that plan and that would help people
0:16:53 > 0:17:02evading tax. But for it to work, the Isle of Man's laws had to be
0:17:02 > 0:17:11changed. The scheme needed approval by the Isle of Man regulator. You
0:17:11 > 0:17:14might think getting approval for something that could help tax
0:17:14 > 0:17:20evaders would prove difficult, but not on the Isle of Man. We have got
0:17:20 > 0:17:25a letter from the lawyers to the regulator, whose job is to make sure
0:17:25 > 0:17:30the rules are followed. Just listen to the language. If you believe it
0:17:30 > 0:17:35would be helpful for us to provide you with ideas as to how to amend
0:17:35 > 0:17:40the regulations in order to more readily accord with our client's
0:17:40 > 0:17:46proposal, please let Simon or myself know. It sounds like they are saying
0:17:46 > 0:17:52if you want help drafting this new law that could assist tax evaders,
0:17:52 > 0:17:57we will do it for you. The regulator does draft a new law and asks for
0:17:57 > 0:18:03the opinions of the lawyers. Let me show you this e-mail. I would be
0:18:03 > 0:18:06particularly interested in any comments that you and or Simon have
0:18:06 > 0:18:11in this regard.I have heard about these things happening, I have never
0:18:11 > 0:18:18seen at this level of detail the transaction, the handoff that goes
0:18:18 > 0:18:21on, where the wealth manager or the representative said, we want you to
0:18:21 > 0:18:26do this with the law, and the public official says right, done, here it
0:18:26 > 0:18:45is.In Switzerland we found the man who drew up the scheme. Now, he
0:18:45 > 0:18:50agreed to talk to us, but he does not know we have seen his plan. I
0:18:50 > 0:18:57want to show you something. This is a very clever scheme to avoid the
0:18:57 > 0:19:02European savings directive. I think you drew this up.Would you talk us
0:19:02 > 0:19:07through this? This was many years ago, it must have been about ten
0:19:07 > 0:19:10years ago.This looks like a plan designed to help people if they'd
0:19:10 > 0:19:17tax, is that right?It is either to evade tax or keep privacy.It is the
0:19:17 > 0:19:21Isle of Man changing their own laws so this scheme to help tax evaders
0:19:21 > 0:19:29can work, isn't it?I would agree, yes.That is amazing to me. What
0:19:29 > 0:19:33should our viewers make of you drawing up schemes to help people
0:19:33 > 0:19:42break the law?Well, every tax adviser, they stick within the law.
0:19:42 > 0:19:46This was not illegal.To be crystal clear, the regulator would have been
0:19:46 > 0:19:51well aware that by changing the law it would encourage schemes that
0:19:51 > 0:20:05allow people to skip EST and evade tax?Yes.We are not talking about
0:20:05 > 0:20:13some distant country. The Isle of Man is part of the British Isles.
0:20:13 > 0:20:21This is where that law was changed. Here it is, the new law. It will
0:20:21 > 0:20:30help tax evaders, it is approved by the Isle of Man Parliament. So what
0:20:30 > 0:20:34would the Chief Minister say about the regulator who helped change the
0:20:34 > 0:20:41law?I do not believe it has happened, but if it has, we will
0:20:41 > 0:20:45investigate.It happened on this island.Let's look at the evidence
0:20:45 > 0:20:51so far. If it happened, I would be disappointed. Given the opportunity
0:20:51 > 0:20:55to look at the evidence, let my team go away, investigate and we will
0:20:55 > 0:21:00take action if it is proven.Will you apologise if the law was changed
0:21:00 > 0:21:07here to help tax avoidance?If it is what you are stating, yes, I will
0:21:07 > 0:21:11apologise on behalf of the Isle of Man government because we are risk
0:21:11 > 0:21:16bonds will tax jurisdiction and we do not condone anything like that.
0:21:16 > 0:21:20The regulator who got the law changed will not answer our
0:21:20 > 0:21:28questions, so I went to pay David Lake MBE visit. Hello, I am Richard
0:21:28 > 0:21:34Bilton from the BBC. Can I ask you a question? Did you change the law to
0:21:34 > 0:21:40help tax dodgers?That is a comment to the Financial Services Authority
0:21:40 > 0:21:46's.You should help us, you changed the law.I have got nothing to say.
0:21:46 > 0:21:52I told your colleague to contact the Financial Services Authority.What
0:21:52 > 0:21:58you say to our viewers who pay their tax?No comment, the responsibility
0:21:58 > 0:22:02was transferred to the Financial Services Authority, contact them. I
0:22:02 > 0:22:08have got nothing to say.The last word to our viewers.Contact the
0:22:08 > 0:22:14FSA.I wonder what they will make of that. Thank you. That is a man who
0:22:14 > 0:22:19helped to change the law so people could dodge tax. Now I put the
0:22:19 > 0:22:31questions to him and he does not want to answer. Not all tax dodgers
0:22:31 > 0:22:36break the law, but the files show the outrageous way some wealthy
0:22:36 > 0:22:47Brits abuse offshore to hide their riches. We have found a home network
0:22:47 > 0:22:55of astonishing tax dodgers. They are run by a tax lawyer, James O'Toole.
0:22:55 > 0:23:01He actually owns this holiday cottage and we are going to stay
0:23:01 > 0:23:15here and use it as a base as we investigate his tax dodging empire.
0:23:15 > 0:23:20But he has got more than just a cottage here. Tax dodging can be a
0:23:20 > 0:23:30lucrative game. Around the back of his cottage all of this over here,
0:23:30 > 0:23:41this is all Mr O'Toole's as well. This is Mr O'Toole's would. This is
0:23:41 > 0:23:56his field. This is Mr O'Toole's walled garden. This is Mr O'Toole's
0:23:56 > 0:24:09orchard. This is Mr O'Toole's house. His estate manager said we could not
0:24:09 > 0:24:14look around because Mr O'Toole is not here. He has got another
0:24:14 > 0:24:25property in the Seychelles. That is quite a grand room. He likes luxury.
0:24:25 > 0:24:30There have been two Aston Martins, a range Rover, a Harley Davidson and a
0:24:30 > 0:24:41Rolex watch. So, how does Mr O'Toole had all this stuff? Well, it is to
0:24:41 > 0:24:45do with offshore. James O'Toole may have spent millions on his house, he
0:24:45 > 0:24:50may have driven around in the luxury cars and warned the elegant,
0:24:50 > 0:24:55expensive jewellery, but as far as the UK taxman is concerned, he does
0:24:55 > 0:25:04not own any of it. This is how it works. Mr O'Toole gives his fortune
0:25:04 > 0:25:09away, it goes into an offshore company. He does not have to pay tax
0:25:09 > 0:25:16any more because it is officially no longer his money. But he is then
0:25:16 > 0:25:24appointed to advise on how the money should be spent. And he can carry on
0:25:24 > 0:25:28enjoying their houses, the Aston Martins, the range Rover, the
0:25:28 > 0:25:38Harley. He even gets a personal shopper to pick up birthday cards,
0:25:38 > 0:25:45by a blender, book a spa, buy shoes, pay for his limousine and suggest
0:25:45 > 0:25:52Mother's Day presents.I think HMRC would take a pretty dim view because
0:25:52 > 0:25:57he distressing up his affairs as something they are not and he is a
0:25:57 > 0:26:01tax expert. So he should know a lot better. I think he must know that it
0:26:01 > 0:26:12would not withstand scrutiny.James O'Toole's lawyer said our
0:26:12 > 0:26:19allegations are ill judged and not supported by any relevant evidence.
0:26:19 > 0:26:24And that Mr O'Toole had prepared a detailed and rigorous rebuttal, but
0:26:24 > 0:26:34is not in a position to engage with our programme. Mr O'Toole does not
0:26:34 > 0:26:40just dodge his own taxes. He runs companies that help other wealthy
0:26:40 > 0:26:50Brits do it as well. There are over 100 of them in our documents.Hello
0:26:50 > 0:26:54and welcome, you are watching your first life coaching television
0:26:54 > 0:27:05channel.Meet this actor, model and life coach.With the right mental
0:27:05 > 0:27:12attitude and discipline everything is possible.She has applied that
0:27:12 > 0:27:19philosophy to the tax laws. She has almost a million stashed in her
0:27:19 > 0:27:23company in Mauritius. She gets cash back to the UK by borrowing it from
0:27:23 > 0:27:32herself.I wish you to live the life that brings millions and love to you
0:27:32 > 0:27:36and people around you.But the evidence in the files shows these
0:27:36 > 0:27:44were not normal loans. She was not paying interest or the loans back.
0:27:44 > 0:27:55It is a tax dodge.In most countries, certainly in the UK, you
0:27:55 > 0:28:00are a tax on income and when you borrow money that is an income. If I
0:28:00 > 0:28:07borrow £10 for new, I would not have to put £10 income on my tax return.
0:28:07 > 0:28:13Where it is a pretence, a sham, as it appears to be in these cases, it
0:28:13 > 0:28:17does not work. It is your income and you should still be taxed on it.
0:28:17 > 0:28:24Time to catch up with the life coach. My name is Richard Bilton and
0:28:24 > 0:28:29I work for BBC Panorama. I am interested in borrowing some money
0:28:29 > 0:28:40but I do not want to pay it back, can you help? You can't? Hello? She
0:28:40 > 0:28:49has gone. She has gone. She later told as she always acted on
0:28:49 > 0:28:55professional advice and said the loans were repayable. She said, to
0:28:55 > 0:28:59the best of my knowledge I have never had money or assets in an
0:28:59 > 0:29:06offshore structure. So, what is this? We found a letter advising her
0:29:06 > 0:29:12on the creation of an offshore structure in Mauritius. It is a tax
0:29:12 > 0:29:22avoidance scheme and her signature is at the bottom. Our next James
0:29:22 > 0:29:29O'Toole client makes his money from cold calls and direct marketing.I
0:29:29 > 0:29:35am the founder and managing director of GCL direct.We think he has been
0:29:35 > 0:29:44sending his money offshore.And everyone is happy.I was wondering
0:29:44 > 0:29:48if you had ever been involved in any offshore tax avoidance schemes? When
0:29:48 > 0:30:00I called him Mr Crowder denied dodging any tax. So, what is this? A
0:30:00 > 0:30:09tax dodging loan of £150,000 with his name on it. He and his wife went
0:30:09 > 0:30:16to fancy resource as well, paid for with the secret, not taxed cash, all
0:30:16 > 0:30:25listed as investments trips. A fortnight in Barbados in 2014, a
0:30:25 > 0:30:31week in Florida at Christmas, in April back to Barbados, and again in
0:30:31 > 0:30:40October. And last year St John has for the weekend by private jet. --
0:30:40 > 0:30:50central pay. We have been in this village or afternoon trying to find
0:30:50 > 0:30:54Mr Crowder and it got dark and we were going to go and we saw him in
0:30:54 > 0:31:00the pub. He was quick to get away. You said you did not know anything
0:31:00 > 0:31:06about offshore and that was not true, was it? Tell us your side
0:31:06 > 0:31:10because you had £1 million in an offshore bank account. You have had
0:31:10 > 0:31:19a pint, tell us your side of the story. Were you dodging tax? Hey! Mr
0:31:19 > 0:31:23Crowder's lawyers later told us he is reliant on reputable,
0:31:23 > 0:31:30professional advisers. They said, our story had a number of factual
0:31:30 > 0:31:33inaccuracies, but because he was not a tax expert he was not able to
0:31:33 > 0:31:44comment further.
0:31:50 > 0:31:55If you want to hide your tax, you do not have to choose Mauritius or the
0:31:55 > 0:32:04Isle of Man. There are British tax havens all around the world. They
0:32:04 > 0:32:14are self-governing but ultimately we in the UK have control. Take
0:32:14 > 0:32:19Bermuda, where Appleby started. It likes to present itself as the
0:32:19 > 0:32:26acceptable face of offshore. This is a place that attracts people because
0:32:26 > 0:32:31of its civilised nature, it is respectable, it has close links to
0:32:31 > 0:32:36the UK. It is a British Overseas Territory, the Queen is the head of
0:32:36 > 0:32:44state. Before they knew about the league, the government told us
0:32:44 > 0:32:56Bermuda was clean.We are regulated very well and it has been recognised
0:32:56 > 0:33:03internationally. One of the big difference that differentiates
0:33:03 > 0:33:07Bermuda to other countries like yours is we just do not accept
0:33:07 > 0:33:13anybody to do business in Bermuda. So we screen people and if you do
0:33:13 > 0:33:17not pass the criteria, then we say, you can go somewhere else because
0:33:17 > 0:33:25you are not coming here.But the documents showed the regulation
0:33:25 > 0:33:33often fails. Look at this presentation for Appleby staff. It
0:33:33 > 0:33:37says there is systemic noncompliance, which means rules are
0:33:37 > 0:33:41being broken. No risk assessment, which means dodgy cases might be
0:33:41 > 0:33:48getting through.
0:33:48 > 0:33:58Appleby told us it takes compliance very seriously. The fact that
0:33:58 > 0:34:01weaknesses were found, candidly reported, addressed and improved
0:34:01 > 0:34:06upon reflects the importance we attach to this area. For
0:34:06 > 0:34:11confidentiality reasons they say they can't comment on clients. They
0:34:11 > 0:34:17say Appleby does not specialise in tax and would play no role in
0:34:17 > 0:34:20advising on the tax advantages or disadvantages of any particular
0:34:20 > 0:34:32structure. There are dozens of companies like Appleby in Bermuda,
0:34:32 > 0:34:39all helping wealthy people and companies avoid tax. And this is
0:34:39 > 0:34:47just one island. Worldwide, the tax losses are enormous.It's making the
0:34:47 > 0:34:52rich richer while the poor get poorer. Every time they close a
0:34:52 > 0:34:55school in your neighbourhood, every time they shut down a bus line,
0:34:55 > 0:35:01every time they have to close a hospital, a lot of that happens
0:35:01 > 0:35:03because rich individuals and corporations are not paying their
0:35:03 > 0:35:10fair share of the costs of society. How much money is being lost to the
0:35:10 > 0:35:17taxpayer?We're talking billions. Worldwide estimates range quite
0:35:17 > 0:35:21widely, we're talking 300 to $600 billion a year lost to tax
0:35:21 > 0:35:24authorities around the world to the benefit of multinational
0:35:24 > 0:35:29corporations.No wonder in Bermuda they don't like being called a tax
0:35:29 > 0:35:36haven. The problem with a tax haven is somebody else -Excuse me.I'm
0:35:36 > 0:35:41not accusing you, Sir.Be careful. Oxfam said you were the number one
0:35:41 > 0:35:47tax haven in the world.Oxfam are wrong.Why?A tax haven is a place
0:35:47 > 0:35:55that A, hides money, doesn't cooperate with other jurisdictions
0:35:55 > 0:35:57and enables basically financial crime, terrorist financing and those
0:35:57 > 0:36:01sorts of things.You have a non-transparent system.We do not
0:36:01 > 0:36:05have a non-transparent system.I can't see it.Well, you don't count.
0:36:05 > 0:36:08Transparency, for it to be transparent, it means everybody can
0:36:08 > 0:36:21look through it.No, it does not.It isn't just British tax havens
0:36:21 > 0:36:29helping tax dodgers. Britain is doing it too. We are the hub of the
0:36:29 > 0:36:37tax dodging empire.
0:36:43 > 0:36:52Here in Germany, they're losing tax revenue because of what we're doing.
0:36:52 > 0:36:59A tax rule, introduced in 2013, allowed big companies to use the UK
0:36:59 > 0:37:08to avoid tax. Take this hotel chain, couldn't be more German. But its
0:37:08 > 0:37:12finances are arranged through the Isle of Man and in doing that, they
0:37:12 > 0:37:22save millions in taxes. This is how it works: The hotels were taken over
0:37:22 > 0:37:27by a UK company. It boar rows a large sum of cash and has to pay
0:37:27 > 0:37:34interest. So profits in the UK go down, which means less tax for us.
0:37:34 > 0:37:40The cash is invested in an Isle of Man company, which then lends it to
0:37:40 > 0:37:45the German hotel chain. They also pay interest, so their profits go
0:37:45 > 0:37:51down as well. That's less tax in Germany too. The German profits end
0:37:51 > 0:38:01up in the Isle of Man, no tax.
0:38:05 > 0:38:12In the past, this wouldn't have worked. The UK used to tax these
0:38:12 > 0:38:19kind of tax schemes at full rate. Not any more. Under the new rules,
0:38:19 > 0:38:28it's now just 4%.While the Government says it's against tax
0:38:28 > 0:38:32avoidance and shifting profits around, when you look into the
0:38:32 > 0:38:35detail of the rules, you find that there are opportunities for
0:38:35 > 0:38:42multinational companies to do exactly that.The travel company
0:38:42 > 0:38:47Holiday Break said their business affairs are conducted within the tax
0:38:47 > 0:38:50regulations and disclosure requirements of the countries we
0:38:50 > 0:38:59operate in. But the European Union has just started an investigation
0:38:59 > 0:39:10into the UK's tax rules, introduced by the coalition Government.The
0:39:10 > 0:39:17reality is that they were constantly introducing new rules to make
0:39:17 > 0:39:24Britain a tax haven of the world. This was a deliberate change brought
0:39:24 > 0:39:29in by the Government to help global companies do nothing other than
0:39:29 > 0:39:35avoid paying their fair share of tax.The Government said today new
0:39:35 > 0:39:39transparency laws were being introduced and all the British
0:39:39 > 0:39:45territories have signed up.This Government believes in a fair tax
0:39:45 > 0:39:50system where everyone plays by the rules. It is this Government that
0:39:50 > 0:39:55has taken decisive action to tackle tax avoidance and evasion and who
0:39:55 > 0:40:06improve the standards of international tax transparency.
0:40:09 > 0:40:19Welcome to Cannes in the south of France. It's the royal regatta. A
0:40:19 > 0:40:30chance to sail a classic yacht or just enjoy the spectacle. This yacht
0:40:30 > 0:40:40is the Leonore. It's the play thing of Brits Harriet Logan and Mark
0:40:40 > 0:40:46Faulkner. Here's Mark celebrating victory in a race four years ago.
0:40:46 > 0:40:50Mark and Harriet have full use of this luxury yacht but they don't
0:40:50 > 0:40:55officially own it. It's how they live their lives. They have all the
0:40:55 > 0:41:04trappings of wealth, but they don't officially own them. Sound familiar?
0:41:04 > 0:41:13That's because they've signed up to one of James O'Toole's tax dodging
0:41:13 > 0:41:19schemes. Mark and Harriet gave their fortune away. It goes it a company
0:41:19 > 0:41:23in Mauritius. But they were then appointed advisors on how the money
0:41:23 > 0:41:30should be spent. They advise the company to buy them a country
0:41:30 > 0:41:40mansion, two properties in London and an Aston Martin. The off-shore
0:41:40 > 0:41:48company even spent £100,000 a year funding Mark and Harriet's yacht, so
0:41:48 > 0:41:55they could enjoy racing at regattas around the world, like this one. ?
0:41:55 > 0:42:06Mark and Harriet also have a home in Cannes. Is Mr Falconer in?No, we
0:42:06 > 0:42:09rent the house.You rent it, do you know where he is?England, I think.
0:42:09 > 0:42:13I guess.You're the crew of the boat, aren't you?No, we use the
0:42:13 > 0:42:21boat but we don't... It's a private... Team.Private team.
0:42:21 > 0:42:24What's Mr Falconer's relationship with the boat?I don't know, why,
0:42:24 > 0:42:28excuse me?I'm a reporter, but he's sometimes on the boat, isn't he?No,
0:42:28 > 0:42:32no.I've seen pictures of him on the boat.I don't know.With you, in
0:42:32 > 0:42:41fact.Yes, but he's not with us. He's not with you. OK, Sir. I've
0:42:41 > 0:42:45seen that gentleman in some of the pictures celebrating with Mr
0:42:45 > 0:42:49Falconer. I know that they have sailed together. What he has told me
0:42:49 > 0:42:53is that they've rented this house from an agency and that Mr Falconer
0:42:53 > 0:43:00is not here, and that he's in England.When you get to this level
0:43:00 > 0:43:05of tax avoidance, then you're getting to the point where everybody
0:43:05 > 0:43:11else is subsidising your luxury lifestyle. As you're cruising on
0:43:11 > 0:43:15your yacht, there's somebody whose benefits have been cut who's paying
0:43:15 > 0:43:22for that. I suspect they know that. But when I reach Mark on the phone,
0:43:22 > 0:43:28he denies everything. I understand you use an offshore structure to
0:43:28 > 0:43:35avoid tax, is that right? Due put money into a Mauritius company to
0:43:35 > 0:43:50avoid tax? Oh. That's just not true then. But the documents show it is.
0:43:50 > 0:43:55Here Harriet suggests the company spend £2 million for her collection
0:43:55 > 0:44:03of iconic photographs and art. And up to £200,000 for fine and rare
0:44:03 > 0:44:11wines. So this is one couple and they say, we want iconic photographs
0:44:11 > 0:44:16and art worth 2 million...It's staggering!200 grand for a classic
0:44:16 > 0:44:20car. We'd like a collection of rare wines, which they say they may have
0:44:20 > 0:44:26to sample.This is unevasive. It's clear avoidance at the very least.
0:44:26 > 0:44:30To have such an interest in what the trust is doing to the extent that
0:44:30 > 0:44:34you live in the home, that you drink the wine and choose the pictures,
0:44:34 > 0:44:38this is not someone having - this is someone having very, very personal
0:44:38 > 0:44:41benefit from it and it looks like a straightforward vehicle to avoid
0:44:41 > 0:44:44having to say that you own those properties. How they're getting away
0:44:44 > 0:44:57with it, I don't know.They got away with it because until the Paradise
0:44:57 > 0:45:06Papers, nobody knew. The couple's lawyers told us that while they did
0:45:06 > 0:45:11not accept our assertions they have commenced dialogue with HMRC to
0:45:11 > 0:45:21review the arrangements that their previous advisors had recommended.
0:45:25 > 0:45:34It's not just wealthy individuals. We've looked at one of the great tax
0:45:34 > 0:45:39avoidance mysteries, what the world's most profitable company did
0:45:39 > 0:45:44when its infamous multibillion tax dodge was shut down. We know what
0:45:44 > 0:45:54happened next.For years, Apple has opted to forgo fully contributing to
0:45:54 > 0:45:58the US treasury and to American society by shifting profits and
0:45:58 > 0:46:08circumventing US taxes.It's already known that Apple has an incredible
0:46:08 > 0:46:15$252 billion stashed off shore, much of it completely untaxed.We pay all
0:46:15 > 0:46:21the taxes we owe, every single dollar. We not only comply with the
0:46:21 > 0:46:30laws, but we comply with the spirit of the laws.For years, Apple took
0:46:30 > 0:46:36advantage of a special deal offered by the Irish Government. They were
0:46:36 > 0:46:40allowed to set up companies that, apart from a small amount in
0:46:40 > 0:46:45Ireland, didn't have to pay tax anywhere else in the world. It was a
0:46:45 > 0:46:56good deal forran companile. -- for Apple. Apple makes huge profits,
0:46:56 > 0:47:01more than $241 billion outside the US in just 11 years. The Irish deal
0:47:01 > 0:47:10meant that Apple could avoid almost all the tax. In fact, they paid less
0:47:10 > 0:47:18than 5% tax on profits outside of America. But in 2014, Ireland was
0:47:18 > 0:47:33pressured into changing the rules, so Apple started shopping around.
0:47:33 > 0:47:36The documents showed the cynical way Apple searched for a tax dodging
0:47:36 > 0:47:43deal. The key concern seems to be that they will not pay tax in their
0:47:43 > 0:47:51new home. It asks the tax haven to confirm that they can conduct
0:47:51 > 0:47:56management activities without being subject to taxation. And they ask is
0:47:56 > 0:48:05it possible to obtain an official assurance of tax exemption? Some of
0:48:05 > 0:48:12the questions are shocking. This one is for the Isle of Man and they ask
0:48:12 > 0:48:17Appleby, is there a credible opposition party or movement that
0:48:17 > 0:48:21would replace the current government. Appleby say no. I am not
0:48:21 > 0:48:26sure what the people of the Isle of Man would make of that summary. But
0:48:26 > 0:48:31this was Apple trying to find the safest tax haven for the hundreds
0:48:31 > 0:48:38and millions of dollars that they had stashed offshore. This is
0:48:38 > 0:48:45shopping around for the best deal they can get in tax havens.It is a
0:48:45 > 0:48:49bit like someone looking for a venue for a wedding. They have got certain
0:48:49 > 0:48:55questions they want answered. What jumps out at you? The Isle of Man
0:48:55 > 0:48:59answers the question whether there is a credible opposition party and
0:48:59 > 0:49:04says, no. It seems quite proud of that. It is saying, do not worry,
0:49:04 > 0:49:12there is no democracy here. Political parties do exist, but
0:49:12 > 0:49:23their influence is nominal.That is very reassuring.In the end Apple
0:49:23 > 0:49:34chose another tax haven in the British Isles. Jersey. And we have
0:49:34 > 0:49:40discovered that two of the companies involved in Apple's Irish tax scheme
0:49:40 > 0:49:45were moved here for tax purposes. We believe they are both managed from
0:49:45 > 0:49:49this Appleby office, which means they both pay the jersey rate of tax
0:49:49 > 0:50:00on profits and that is no tax at all. It is completely secret, but
0:50:00 > 0:50:07very important for taxpayers around the world. Billions may be at stake.
0:50:07 > 0:50:12Hello, I just want to talk to somebody who looks after the Appleby
0:50:12 > 0:50:23company. I want some answers about this crucial account. Apple
0:50:23 > 0:50:25Operations International and Apple Sales International are both based
0:50:25 > 0:50:33here?The Appleby organisation is based here.No, the Apple company.
0:50:33 > 0:50:39Appleby have got nothing to do with that.They have got two companies
0:50:39 > 0:50:49based here?I would have to check that out.He is going to clarify. It
0:50:49 > 0:50:57takes a while. He goes away for 15 minutes.I am speaking on behalf of
0:50:57 > 0:51:03of Appleby and we had no knowledge of Apple in this building.Apple
0:51:03 > 0:51:06Sales International and Apple Operations International, you cannot
0:51:06 > 0:51:11find anybody in the office who knows about that?From an Appleby
0:51:11 > 0:51:19perspective, yes.The answer is we do not know?From an Appleby
0:51:19 > 0:51:24perspective, we have no knowledge of that.Thank you very much indeed,
0:51:24 > 0:51:29thank you for your patience. Goodbye. So, after quite a long
0:51:29 > 0:51:35delay and wake the message came back we do not know about those
0:51:35 > 0:51:40companies, we cannot find anybody in the office who knows about Apple
0:51:40 > 0:51:43Sales International or Apple Operations International. It is so
0:51:43 > 0:51:48secret that even the people in the office do not know about it. That is
0:51:48 > 0:51:54what he is saying. But our documents showed the two Apple companies were
0:51:54 > 0:52:01administered from these offices until last year. Now, Apple declined
0:52:01 > 0:52:07to answer our questions but said as the largest taxpayer in the world we
0:52:07 > 0:52:11have paid over $35 billion in corporate income taxes over the past
0:52:11 > 0:52:20three years. They add, the changes we made did not reduce our tax
0:52:20 > 0:52:31payments in any country. This year, Apple paid tax of just 3.7% on its
0:52:31 > 0:52:37non-US profits. That is less than the sake of the average corporation
0:52:37 > 0:52:44tax rate.You can see them as this fantastically innovative IT company,
0:52:44 > 0:52:48but you can also see them as a fantastically innovative tax dodger.
0:52:48 > 0:52:53They seem to be leading the world and they have come up with the
0:52:53 > 0:53:03latest tax dodging product.
0:53:04 > 0:53:11Back at my holiday home it is time to put my feet up and relax.Ladies
0:53:11 > 0:53:17and gentlemen, welcome to Mrs Brown's Boys.Mrs Brown's Boys is
0:53:17 > 0:53:24one of the most popular shows on the BBC. It is made by the production
0:53:24 > 0:53:31company owned by the programme's star, Brendan O'Carroll.Do you want
0:53:31 > 0:53:38a cup of tea? Yes, please, what is art?But we have discovered some of
0:53:38 > 0:53:45the actors are stashing their fees or wages offshore. They include
0:53:45 > 0:53:52Patrick Houlihan who plays Mrs Brown's son, Dermot.You could have
0:53:52 > 0:53:58stayed in bed a bit longer.And Brendan O'Carroll's real-life
0:53:58 > 0:54:10daughter, Fiona Delany. And her husband, Martin Delany. It is one of
0:54:10 > 0:54:23James O'Toole's tax dodgers. This is how it works. The actors get their
0:54:23 > 0:54:31wages sent offshore, tax-free. The cash ends up in a company in
0:54:31 > 0:54:37Mauritius and the actors are recruited as investment managers.
0:54:37 > 0:54:41They advise that the money is loaned straight to their personal bank
0:54:41 > 0:54:53accounts, no tax. Take Fiona Delany, in just 16 months her Mauritian
0:54:53 > 0:55:00company lent her over £360,000. It is just the way of disguising her
0:55:00 > 0:55:10income. I just wondered how pure wages ever been paid offshore? I
0:55:10 > 0:55:14want to know did your wages go to a company in Mauritius and then you
0:55:14 > 0:55:23got the cash back in loans? Is that right as I understand it? Oh, so
0:55:23 > 0:55:29Fiona talked for a while and said that she did not think she did have
0:55:29 > 0:55:37any offshore deals. When I gave her a few more details she ran off. We
0:55:37 > 0:55:43found that three actors from a famous BBC TV show sent their wages
0:55:43 > 0:55:46offshore and then they learn that money back to themselves in order to
0:55:46 > 0:55:54pay no income tax.I am shocked by that because that is not playing by
0:55:54 > 0:55:59any fair rules. Do they pay the loan back?The evidence is that they do
0:55:59 > 0:56:06not.That is a dodge.Are you surprised it still goes on?I am
0:56:06 > 0:56:09shocked how they have not been caught yet. Maybe after this
0:56:09 > 0:56:18programme they will be.Fiona Delany has not responded to our e-mails. So
0:56:18 > 0:56:25I have come to BBC Scotland where they are filming Mrs Brown's Boys.
0:56:25 > 0:56:31Hello, Fiona, it is Richard Bilton from Panorama. Can I grab a quick
0:56:31 > 0:56:36word with you? I called you a few weeks ago. You get paid in
0:56:36 > 0:56:41Mauritius, don't you? What is that about? Do you pay the loan back? Is
0:56:41 > 0:56:50it a tax dodge?I do not know who you are.I am from Panorama and you
0:56:50 > 0:56:55are from Mrs Brown's Boys and you are a tax dodger. That is not funny
0:56:55 > 0:57:03at all, is it? But what about the show's star, Brendan O'Carroll?You
0:57:03 > 0:57:09do not want Panorama for company.He told us he pays the actors were a
0:57:09 > 0:57:13company in the UK and cannot control what happens afterwards and has
0:57:13 > 0:57:18never been involved with any tax avoiding scheme. Brendan O'Carroll
0:57:18 > 0:57:21said, I reserve the right to take the most severe legal action
0:57:21 > 0:57:27available to me. That is lawyer speak. I would have just said
0:57:27 > 0:57:35(BLEEP) off.
0:57:42 > 0:57:45The Paradise Papers have revealed the secrets of Britain's tax dodging
0:57:45 > 0:57:53empire.It is bad for the reputation of the Commonwealth and the UK. We
0:57:53 > 0:57:58have got to see a clamp-down to stop these loopholes and to stop these
0:57:58 > 0:58:06jurisdictions doing what they are doing.How we help big companies and
0:58:06 > 0:58:12the super-rich avoid paying their fair share.I think most people
0:58:12 > 0:58:16would think there is something wrong here. They are paying higher taxes
0:58:16 > 0:58:20as a result of these people paying lower taxes and these people are all
0:58:20 > 0:58:26incredibly wealthy.The documents have pulled back the curtain on the
0:58:26 > 0:58:31offshore world and those who use it. I guess at some level everyone wants
0:58:31 > 0:58:37to be able to do as they please and not have anybody be their boss,
0:58:37 > 0:58:40including the state. What offshore provides is a place where you can do
0:58:40 > 0:58:51that.Britain's offshore empire is a place where the rich and powerful
0:58:51 > 0:58:58save money at our expense. Now that shady world has been dragged into
0:58:58 > 0:59:13the light. It is hard to imagine it will not be forced to change.