Bank employee ‘not typical’
Wednesday 23rd September 2009, 3:00PM BST.
Lloyds employee Oliver Jones being secretly filmed for the BBC’s Panorama programme
FINANCE industry spokesmen have lined up to insist that the Lloyds salesman featured on Panorama’s bank ‘exposé’ on Monday was not typical of Jersey’s banking sector.
They have insisted that his behaviour, and the advice he gave, was extraordinary and not symptomatic of a failing system.
It can today be revealed that the man secretly filmed in the Lloyds TSB Offshore headquarters in St Helier was Oliver Jones. Mr Jones was recorded advising a businessman on how to invest £4 million in order to avoid paying tax.
He was caught on camera saying that the fund would be managed in Jersey with the income from it sent to Hong Kong, from where dividends would be paid out to clients. Mr Jones told the Panorama businessman that the management of the fund via the Far East was little more than a paper trail to get the money outside of the European Union. Asked why this was done, he added: ‘Just to get round the EU tax, basically.’
He told the businessman that it was none of the bank’s business whether he informed the Inland Revenue of the transaction.
Mr Jones has been suspended pending the outcome of an investigation by Lloyds. An inquiry will also be launched by the Jersey Financial Services Commission once the Lloyds investigators have reported their findings.
Read the full story in the Jersey Evening Post.
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It is actually quite predictable and unsurprising that the “Finance Industry Spokesmen” have lined up to defend their corner, they are bound to as they do not want to be tarred with the same brush of course.
Well at least, thanks to BBC’s Panorama programme and now that this subject is well and truly in the limelight it will now hopefully stamp out this dodgy dealing and perhaps the UK tax coffers will now increase, quite rightly so, or perhaps it will encourage people with disposable amounts of money to flood Jersey for “UK Tax avoidance advice”?
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“not symptomatic of a failing system” – excuse me if i’m wrong but I thought the system HAD failed which is why we are all now in the smelly stuff up to our necks!!!
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Why was he able to offer such a product in the first place?
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Well- they would say that wouldn’t they??!!
Unlike Guernsey, where the Guernsey Press allowed comments on the Panorama programme and it was also stated that the potential damage that this revelation could cause to the Finance industry there was large.
Mr Jones will be made a scapegoat for what most people believe is a less than transparent industry. I am sure he is not a lone voice.
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Are you sure spokesmen? Really sure? I think not..
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The banker here was only the messenger. He was selling a product structure established by the senior management of the bank. Mr. Jones certainly didn’t set up the sophisticated facility for a fund to route its income via Hong Kong to the client. A fund wouldn’t allow that unless it was working in cahoots with senior management of Lloyds
Finance Industry must think we’re a bunch of stupid plonks to believe them.
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Sure he’s not typical and his bosses didn’t know what he was doing. Neither did mine when I worked as an RM for a major high street bank. They employed me and a team of others especially to deal with the then new European Union Savings Directive ( EUSD ) we advised high net worth clients how to invest in Singapore and avoid paying tax.
Jersey government don’t care what the banks do providing they appear to conform and are responsible for a large amount of tax revenue from employees.
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Mark the structure is NOT against the law as its tax avoidance not evasion and guess what – similiar structures are set up in the UK and US – the only thing which may be against the law with this would be if the banker thought the client wasn’t going to declare it to the tax authorities where he lives and didn’t report it to the JFSC.
Incidentally he would be paying tax to Hong Kong but at a lower rate…
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It would be nice to see the JEP point out that the fund which pays out an income via Hong Kong was constructed by Lloyds and as a Jersey domiciled fund approved by the JFSC or at least regulated by them.
The question should be asked of the bank and the JFSC why the fund had it’s income paid via Hong Kong and why it was approved.
Did the JFSC fail in its regulatory duty?
It is intersting to note that the Fund KFD as published on the internet does not mention where the income is paid from and neither does the fund fact sheet.
The prospectus applicable to all of the range of offshre funds does state:
‘It is the responsibility of the Shareholder to
account to the relevant tax authority for any
tax due on income received.’
‘Although EUSTD is aimed primarily at savings
income, certain funds do come within scope of
the Directive, however this Company will be
out of scope of the Directive and as such
Retention Tax will not be applied to any
payments to Shareholders.’
So there you go; Lloyds Offshore should be asked why their entire range of funds pays out any income from half way around the world? And should be compelled to answer.
Obviously this will not happen instead some poor unfortunate will be sacrificed on the alter of the Jersey Finance Industry
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Not typical eh? Who are they trying to kid? So but I don’t believe them. How many other little schemes are on the go to get around paying taxes? How do we know this isn’t common practice?
As per this guy I don’t believe he was acting off his own bat. Why would he make brazen comments like this? How do we know it wasn’t secret company policy? It doesn’t make sense that he was a lone operator to me.
Get rid of tax avoidance and be done with the whole sorry saga. Let everyone pay according to their income this is fair and just.
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Did i hear right.our nearly there new first minister,oz.states.well how do we know,that this was infact jersey.god help our little island,if he does become the next 1st minister.i really think,that he lives on another island.
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Llyds bank has done nothing illegal. The Uk authorities absolutely supports these kinds of transactions. It is up to a Uk resident to comply with disclosure not the bank. So the program may have informed the layman but the system is not new to the authorities.
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It is so ironic that Jersey has for the last 15 years pleaded to the outside world that that it is whiter than white when we all knew the truth and then in less time than it takes to transfer funds from Jersey to Hong Kong the whole aberration is blown wide open.
You can’t blame the poor unfortunate, he didn’t dream up the scheme and where are his “supervisors” in all of this. I hope he gets a big cheque out of LLoyds on condition that he doesn’t publish his story in News of the World.
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I Have to say this is where bonus payments will have to be looked at, This is the problem it’s like selling a car over the odds, you big it up to the customer to make it look interesting,even though there are flaws, theProblem with this is the seller tells the customer what they want to hear to get the business and make a nice profit. You will rarely get the whole truth or the small print out of a banker, thats why the banks are in the state there are in. Sad but they only have themselves to blame. They also have to start admitting to it rather than pass the blame around. It makes them look untrusting and makes the general public lose faith in the system.
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I feel sorry for Oliver Jones of Lloyds TSB Jersey. He has been made a scapegoat for what we all know the offshore finance industry is all about: tax avoidance – or tax mitigation, as well-paid lawyers, accountants and other professional advisers like to call it.
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JG #4
Well of course the Guernsey press would say that. That sets them up to entirely blame Jersey for any repercussions of this.
Taxator #15
That’s right – well paid lawyers, accountants not to mention investment advisors, fund managers, financial advisors, all of their support staff and more – all of whom pay tax as they earn and GST etc to support the local economy and other small businesses by buying their products/services (who in turn pay tax) so the less well off do not have to worry about education for their youngsters or hospital treatment should they fall ill. What evil people that they are!
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Joker in a way i do agree with what your saying, Problem with this is people have it in there heads over here that lawyers, accountants, investment advisors,fund managers and people in this line of buisness, dodge the tax man via there accountants. I for one dont know if this is true as im not involved in this type of buisness, but i do know a few ex accountants who have told me that a lot of people in the finance industry manage to dodge 90% of the tax they have to pay due to loop holes in the taxation systems. Also these people dont pay GST as there exempt from it i know that for fact look on the internet as it is open to all, so are most uk based companies in Jersey.(remember zero ten) The only problem I have is the gap that has become more and more noticable, The poor and rich margin is increasing more and more each year and its becoming silly.
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‘I do know a few ex accountants who have told me that a lot of people in the finance industry manage to dodge 90% of the tax they have to pay due to loop holes in the taxation systems.’
Did he explain how they do this without it being outright tax evasion? Sounds like yet another Jersey tax urban legend to me…
‘Also these people dont pay GST as there exempt from it’
Not necessarily. GST will be charged on all goods and services a Jersey companies uses unless they have international service entity (ISE) status. To qualify as an ISE, at least 90 per cent of a company’s clients must be non-Jersey based. While this may be true for most fund managers and some investment advisors, it certainly isn’t true of lawyers and accountants.
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