THE body representing many of Britain’s accountants has said the case for reforming Scotland’s controversial tax haven firm laws is “compelling”.

The Association of Accountancy Technicians has urged the UK Government to close a loophole which allows once obscure Scottish Limited Partnerships (SLPs) to be abused by money-launderers and gangsters.

Scores of such businesses – whose owners can be secret, file no accounts and pay no taxes – have been exposed by The Herald over the last two years as fronts for everything from alleged child porn websites to corrupt politicians and officials in the former Soviet Union.

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Adam Harper, director of strategy and professional standards, at the AAT said he believed secrecy rules were making SLPs vulnerable to such abuse. He said: “A lack of transparency appears to be the only obvious advantage of a Scottish Limited Partnership.

“There’s no real economic benefit to Scotland either, so the case for reform is compelling.”

There is all-party support for reform of such instruments in Scotland with the campaign for new laws being led by SNP MP Roger Mullin in Westminster.

The UK Government last month announced a consultation on how to reform SLPs. Mr Harper, in a formal response to that consultation, said he believed SLPs should be treated exactly the same way as limited companies.

This would mean they would be required to file audited accounts, comply with legislation which insists firms reveal their “person of significant control” and have a workable address in the UK. SLPs have been widely advertised globally as vehicles for secrecy and tax evasion.

Agencies selling off-the-peg shell companies stress that SLPs, like limited companies, have legal personality, meaning they can own assets or sue in legal cases.

However, they also highlight that such firms are also tax transparent: it is their partners, not the entities themselves, which are responsible for paying tax.

Most SLPs set up in recent years – and there are some 27,000 of them – have partners which are shell corporations in traditional tax havens such as Belize or Panama. These are therefore perfectly legally able to pay no tax on any profits made outside of the UK.

Mr Harper and his team have called for an end to this practice, saying at least one partner should be a real physical person rather than a corporate body.

His body represents some 50,000 accountants and other professionals.

There is some concern about the reform of SLPs from Scottish law firms which set them up on behalf of international investors, especially private funds.

Law firms such as Harper Macleod and Burness Paull – one of the biggest creators of SLPs for investors – have warned that wholesale changes could affect their business.

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One Burness Paull partner, Alan Soppitt, last month told The Times that concerns over SLP transparency were unfounded, saying the Scottish firms were no more or less secret than those incorporated in England and Wales.

English and Welsh firms do not, however, have the legal personality enjoyed by their Scottish counterparts.

The Herald last month revealed that a second major arms expert corruption scandal in Ukraine featured an SLP at its heart.