This blog will address the question: Will The UK Become An Offshore Haven For Crime Under New Ship Register Plans?
The United Kingdom is creating a register of ships that are flagged to the United Kingdom. This is an attempt to fight corporate tax evasion to ensure businesses and individuals are paying their fair share of UK corporation tax.
These British ships are therefore subject to British law and must meet UK standards in a number of sectors including ship design, manning, and training.
This initiative came into effect as part of part of the Clean Shipping Act 2018 which received Royal Assent on 21 January 2018. In addition, it was announced that any ship flagged in the UK will have to comply with the International Code for Ships Operating in Polar Waters by 20 November 2018 or risk being de-flagged.
The United Kingdom New Register Plan which went into effect in 2002 is based on whether or not companies are willing to share financial reports and other sensitive data with the government in exchange for lower tax rates.
Before, if you were based in England but did business elsewhere, they would charge you taxes wherever your sales came from — giving them more income than needed.
The register will give greater insight into beneficial ownership, and will enable stricter enforcement of tax regulations and other legal obligations on companies based in the UK.
The register will cover companies (LLPs), partnerships (LPs) and individuals.
It will also provide a higher degree of information regarding the safety record of vessels flying a British flag – making sure foreign firms can’t simply change their flag in order to avoid problems on the high seas.
However , it is a major imperative to the shipping industry . The added safety concerns comes due to the fact that countries that currently have registration authorities but do not have a separate flag, will now create a sub – flag for UK registered ships.
This means that even though they are flagged in the UK and are bound by the rules of their country of origin , they will have fewer regulations regarding cargo .
However, supporters argue that this measure will help combat money laundering, tax fraud, and drug trafficking. The New Register Plan is supposed to combat money laundering, tax fraud, and drug trafficking. Unfortunately, the new plan in its current form does not provide information on companies’ beneficial owners. In general, a beneficial owner is the true controller of an entity. They often have an interest distinct from that of another entity’s creditors or members.
Tax havens like the Cayman Islands are already well-known by entities wishing to record a corporate presence in a location that has less stringent financial reporting laws than their home country. However, now there are growing concerns that the UK will become an offshore haven for crime under new register plan proposals.