The Paradise Papers: What you need to know

Paradise Papers

13th November 2017

In arguably the biggest leak of financial information since the Panama Papers, last week saw news of the Paradise Papers hit headlines. Obtained by German newspaper Süddeutsche Zeitung, the documents were shared with the International Consortium of Investigative Journalists (ICIJ) who have since uncovered a number of intricate off-shore schemes being used by high-profile and high-net-worth individuals to reduce their tax payments.

The Paradise Papers in a nutshell

While new developments are being revealed on a daily basis, here are the top highlights of the leak so far:

  • The data spans from 1950 to 2016 and contains 13.4 million records
  • While the size of the data isn’t on the same scale as the Panama Papers, the information contained is arguably more damning
  • Just some of the key figures involved include the Queen, Prince Charles, Lewis Hamilton, U2 star Bono and Lord Ashcroft, with brands including Apple also being named and shamed
  • Law firm Appleby – a leading international provider of offshore legal services – is at the centre of investigations. The firm helps corporations, financial institutions and high-net-worth individuals register companies in off-shore jurisdictions
  • The Paradise Papers revealed that Appleby has helped over 50 individuals set up businesses and import planes to the Isle of Mann to be ‘leased’ back to the owners. As a result, more than £790 million has been refunded through VAT claims. This is just one such scheme the firm is involved in
  • The leak has global significance, with individuals and companies being named in the data from multiple locations, including Canada, India, Japan, the US, Bolivia, Argentina, Russia and many more.

Panorama investigates

The papers were even the focus of Panorama last week, as investigative journalist Richard Bilton tracked down just some of those involved in this latest scandal. Many of his findings were certainly interesting. In a follow up of Appleby’s jet leasing scheme in the Isle of Man, for example, Bilton found evidence which suggests that the government amended regulations in order to help individuals and companies ‘get around’ the European Savings Directive.

While throughout the program many of those questioned refused to comment, the evidence proved damning to many. And given the global outcry over the information contained in the data, it’s highly likely that international authorities will soon be stepping in to take action.

It’s just not worth it

We can certainly expect to see more revelations in the coming days and weeks, but the really interesting detail in this leak is the type of people involved. These high-net-worth individuals are at the top of the food chain and the fact that their tax avoidances schemes have been revealed should be an eye-opener for the rest of us.

In fact, Gerard Ryle, who oversees member journalists at the ICIJ, commented: “This leak is important because it’s the high end of town. People may have dismissed the Mossack Fonseca leaks as they were rogue players who would take any client. Most of the offshore world is not like that at all. Here you have the gold-plated company.”

Given the high-profile names caught up in this latest leak it’s perhaps safe to say that no one is truly above the law. For recruitment firms operating across the globe it’s worth noting that if these powerful individuals and brands with a wealth of tax professionals behind them are being publicly shamed for using tax avoidance schemes, you will too. With authorities around the globe aiming to tighten up the rules and prevent this behaviour, it’s just not worth the risk.

We would of course like to make it absolutely clear that there is no suggestion, at this stage, that any of the participants (individuals or corporations) acted illegally or evaded tax.

If you’re seeking expert advice for your international contractor management solutions, why not get in touch with our team today?


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