The size of Jersey's financial services industry compared to
other sectors of the economy is not exceptional, when comparisons
are made elsewhere in the UK, according to the recent study into
Jersey's value to Britain.
As part of its detailed analysis of the Jersey economy, Capital
Economics, a leading macro-economic research company, compared the
Jersey economy with the industrial structure of all local
authorities in Great Britain with employment levels similar to
The report author, Mark Pragnell, concluded that 'although
the Island has 2 ½ times the United Kingdom's rate of
employment in finance, this degree of specialisation is typical of
authority areas of a similar size. He added: 'Such
concentration on a single sector is unremarkable for an economy
squeezed onto a 45 square mile island.'
Using an analysis of labour statistics in Jersey and the UK, the
report compilers were able to plot a graph which illustrated that
Jersey's finance industry while dominant, was about average in
scale when compared to the size of local finance industries in
locations in the UK which were also overweight in finance such as
in Mid-Sussex, Reigate and Eastleigh. In fact, the statistics
showed that locations such as Perth and Kinross in Scotland and
Runnymede and Blaby in England were far more reliant on their
energy sector in support of their respective economies.
In Jersey, the finance industry accounts for around 25% of
jobs compared to 11% in the UK, while 40% of Jersey's gross
value added – the contribution to the economy - was
accounted for by Finance and related industries, the study
Geoff Cook, CEO, Jersey Finance Limited, commented:
'While these findings should not in any way detract from the
goal of encouraging greater diversity in our economy which the
Industry fully supports, it is helpful I believe to have some
context when discussing the role of the finance industry within the
Jersey economy. It is by far the major provider of tax revenues
that pay for public services, but it is not disproportionately over
dominant when comparisons are made with similar sized locations in
The Capital Economics study concluded that Jersey was an
overwhelming benefit to the UK. Among its findings were that Jersey
was a conduit for nearly £500 billion of foreign investment
into the UK, comprising 5% of the entire stock of foreign owned
assets; the island helped the UK generate around £2.3 billion
in tax revenues each year and supported an estimated 180,000
Although some UK tax may leak through Jersey – no more
than £150 million a year of British taxes could potentially
be evaded using Jersey – the amounts were dwarfed by the
overall tax contribution by Jersey to the UK exchequer and the
report concluded that the recently approved information exchange
agreements would substantially reduce or eliminate the potential
for tax losses through Jersey.
The findings have been widely disseminated in Government circles
in the UK and to finance industry clients of Jersey in London, and
there has been considerable coverage of Jersey's value to the
UK in leading national media including the Financial Times, the
City AM newspaper in London, the BBC and in many trade and
professional magazines within the UK. Further coverage of the
findings are planned including a feature in a leading magazine with
a readership of Westminster MPs, civil servants in Whitehall
and parliamentary researchers.
Many people are baffled by trusts, the purpose of which they don't fully comprehend. Some even regard them with suspicion, as tools of of opaque tax evasion strategies of a type favoured by wealthy individuals.
We were recently instructed by a Bank in relation to a regulatory matter. The Bank had made a suspicious activity report to the Financial Investigation Unit ("FIU") due to their concerns about the potential source of funds in an account.
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