Aberdeen Asset Management named in Paradise Papers
A number of Scotland’s biggest and most prominent firms, including financial industry giant Aberdeen Asset Management, have been named in the so-called ‘Paradise Papers’.
The documents have caused a storm of controversy over corporate tax avoidance since their disclosure last week after a cyber hacker infiltrated the records of Bermuda-based law firm Appleby.
More than 13 million documents were leaked as a result of the hack, detailing information about 120,000 organisations and individuals.
And it has now emerged that Glasgow-based engineering giants Weir Group and chemicals heavyweight Ineos, along with AAM, have used the offshore firm.
Appleby’s work is often intended to reduce clients’ tax liabilities and the firm works for some of the firms involved arranging payment of salaries and bonuses to some of their 30,000 staff from offshore accounts.
Some of these bonus schemes have been questioned by the tax authorities with staff paying just 10 per cent on bonuses instead of the 40 per cent they should have paid if they were in the highest income tax bracket.
Aberdeen AM, which merged with Edinburgh-based Standard Life earlier this year, said it had used a company associated with Appleby in Jersey to help pay bonuses to staff under a staff share scheme, but a spokesman for AAM said the payments were all “fully taxed in the UK at UK levels” and that it used an offshore structure for the payments because of the “quality of service provided by the firm”, not in an effort to minimise its tax bill.
Ineos bosses, meanwhile, initially denied using Appleby only to later admit the company had employed the law firm in the past, albeit not for several years.
While there is nothing to suggest any of the Scottish firms have acted illegally, speaking at a meeting of the British-Irish Council in teh wake of the revelations, Scotland’s First Minister Nicola Sturgeon demanded more transparency and the tightening of regulations allowing firms and individuals to slash their tax bills.
She said: “We must have rules and regulations in place that properly promote tax transparency, but also operate to close down any tax loopholes people are using in order to unfairly minimise the tax that they pay.”