The UK together with its network of Overseas Territories and Crown Dependencies are often referred to as the “UK spider’s web”. This is because the UK’s Overseas Territories and Crown Dependencies often serve as satellite jurisdictions for facilitating profit shifting and illicit financial flows. The jurisdictions serve like nodes in a world-spanning web of money flows, at the centre of which sits the City of London, where multinational corporations and individuals can shift their profits and wealth after rerouting them via the satellite jurisdictions. This allows tax abusers to underreport the true value of their profits and wealth elsewhere in the world in order to pay less tax than they should.
The UK has full powers to impose or veto law-making in these Overseas Territories and Crown Dependencies, and the power to appoint key government officials in Overseas Territories and Crown Dependencies rests with the British Crown. The geographical and political distance allows the UK to hypocritically enable some of the worst forms of financial secrecy and corporate tax abuse around the world while maintaining more reputable tax and transparency standards at home.
The Tax Justice Network’s Corporate Tax Haven Index 2019, a ranking of countries’ complicity in global corporate tax havenry, estimated the UK spider’s web to be responsible for over a third of the world’s corporate tax abuse risks as measured by the index in 2019.
For more information about the UK spider’s web, watch Michael Oswald’s seminal documentary “The Spider’s Web: Britain’s Second Empire”, co-produced by Tax Justice Network founder John Christensen, on YouTube for free.
The documentary is available in English, Spanish, French, German and Italian. Subtitles are available in French, Spanish, German, Italian, Russian, Arabic, Korean, Hungarian, English, Turkish, Portugese, Chinese, Croatian and Japanese.