Pressure is mounting on Prime Minister Theresa May to launch a crackdown against a legal loophole that has seen Scotland advertised as a tax haven across Eastern Europe after an intervention by all five party leaders north of the border.
The five, who include Scottish Tory leader Ruth Davidson, have expressed their support for an Oxfam Scotland campaign to ensure Scottish Limited Partnerships (SLPs) can’t be misused to avoid tax.
SLPs registered in Scotland have been linked to major corruption scandals in the former Soviet Union, while others have acted as fronts for international websites used to share child pornography.
In one case, a "limited partnership" company in Fife, the Brook Organisation, was named as part of an investigation into an £8 million turf war between the nephew of Uzbekistan's authoritarian President Islam Karimov and a business rival.
There are about 25,000 SLPs registered in the UK.
They do not pay tax in the UK if they do not trade here.
Critics say that the owners of the vehicles are attracted by the fact they can remain secret, file no accounts and pay no taxes.
Jamie Livingstone, the head of Oxfam Scotland said: “The backing of all five parties in the Scottish Parliament sends a powerful message that Scotland has no desire to be linked, in any way, to the practice of tax avoidance."
Ms Davidson wrote to the chairty to say that the Scottish Conservatives "support your statement against tax avoidance and the misuse of SLPs".
She added that she had been "concerned" by reports linking SLPs to criminal activities.
"Tax dodging leaves people with a simmering indignation and a feeling the system seems rigged against them", she wrote.
Mrs May has pledged to use her time as Prime Minister to create a UK that "works for everyone".
The campaign has also been backed by First Minister Nicola Sturgeon, Scottish Labour leader Kezia Dugdale, Scottish Liberal Democrat leader Willie Rennie, the Scottish Greens Patrick Harvie.
Mr Livingstone said: “We are hugely grateful to the more than 2,100 Oxfam supporters who contacted Scottish party leaders to raise their concern about the reported abuse of SLPs – today we can say that they listened.
"SLPs are insufficiently transparent and there is growing evidence this is being exploited by those who want to dodge tax. Not all SLPs are being abused, but we urgently need transparency to crack open these ‘shell companies’ and identify the rotten eggs that are abusing SLPs. Tax avoidance, wherever it happens, is wrong. It denies governments - at Scottish and UK levels, as well within developing countries - vital revenue which could be used to tackle poverty.
“Oxfam cares about tax dodging because we know it is the poorest people who lose out most. Tax avoidance, wherever it happens, is wrong. It denies governments – at Scottish and UK levels, as well within developing countries – vital revenue which could be used to tackle poverty.”
He added: “Scotland has made its views on this issue clear. Now it is time for Westminster to act."
Last month the UK Government suggested that it was considering moves to crack down on the abuse of SLPs.
Security minister Ben Wallace said that the system had "clearly" been abused, adding: "We want to make sure that does not happen".
But the SNP has accused the Conservative Government of being too slow to act on the issue.
Mr Wallace was speaking as MPs took evidence on the new Criminal Finance Bill currently going through Westminster.
A UK Government spokesman said “Tackling tax avoidance, tax evasion and aggressive tax planning - including where partnerships are involved – is a key government priority. We take accusations of criminal activity and tax evasion extremely seriously and this issue is currently being looked at carefully.”
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