Westminster City Council will take steps today to tackle economic crime and international corruption in order to combat the capital’s reputation as the European centre for money laundering.
The council is set to pass a motion this evening that approves the signing of the Fair Tax Pledge, which aims to ensure the fair payment of taxes, business rates and employment taxes through robust implementation of IR35.
The council will also pledge not to use offshore vehicles for land or property purchases and will check to ensure suppliers are not inappropriately utilising not-for-profit structures to avoid tax.
Council leader Adam Hug is also convening a meeting of major property owners, experts and officials in the capital to join the City in a new ‘Westminster against dirty money’ campaign.
Westminster has seen a 300% rise in the number of properties registered to owners in Jersey since 2010 and a rise of 1,200% in the number of properties registered to owners in Russia.
Cllr Hug commented: ‘Westminster’s dirty secret has been known for many years but those in power looked the other way for too long as money of questionable origin flooding into London and investors took advantage of our relatively lax laws.
‘It took the war in Ukraine to refocus attention on oligarch investments and what London has become in terms of a European laundromat for dirty money. But the problem goes wider than Putin and his henchman to many others who see Belgravia, Knightsbridge, Mayfair and other parts of Westminster as places to rinse their money.
‘This not only damages the reputation of our city by supporting authoritarianism abroad but drains the vitality of areas with empty or under-used homes.’
The council urged the Government to tighten UK procurement laws to restrict the artificial use of tax havens and low-tax jurisdictions.
It also called for an increase in the fee to register a company at Companies House from £12 to £50 and for the introduction of more rigorous identity checks.
Cllr Hug continued: ‘Companies House does not have the powers or resources to address those who set up opaque shell companies to launder and export money from London. There are more background checks required to get a local authority lending card then to set up a company in the UK.
‘We want to work with Government Ministers and agencies to crack down on dirty money and ensure agencies like HMRC and the National Crime Agency are properly resourced.’
