The University must come clean on “tax haven” dealings

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With so little information being made readily available by the University regarding their business dealings involving the Heslington East colleges, it’s very difficult to discern whether or not they’re doing anything wrong.

But here’s what we know: they split ownership of Goodricke and Langwith colleges between two companies, took half of each themselves and sold the rest to another company which can be traced to Jersey (where they don’t have corporation tax), without telling their students.

I wouldn’t go as far as to accuse the University of hiding the fact that they aren’t the whole owners – you can find this information if you snoop around in Companies House for long enough. But they certainly didn’t go out of their way to make sure that we all knew. They can’t tell us enough about the £500m investment into the Heslington East campus from 2000 to 2010, or the further £60m which was invested over the last year. But they’ve kept remarkably quiet on the topic of who the profits of all this go to.

And there certainly are profits.

In fact, over £1m in profits was registered in 2012. What’s more, the University’s partner company, Evans University Accommodations Limited, is subject to Jersey’s tax laws rather than UK’s – though this doesn’t necessarily mean they didn’t pay any UK tax.

Certainly, some companies that are registered to tax havens do so for reasons unrelated to tax avoidance. It would make perfect sense, for example, for a Jersey-based company that provides tours of the island to be registered there. We know Evans Property Group is not an island tourist agency, but we don’t know why it’s based in Jersey.

Drachs Investment No. 3 Ltd, the company which wholly owns Evans University Accommodation Limited, vehemently denies knowing why they share offices. We’d like some clarity as to why they chose to be based in Jersey – because it might not be for tax reasons.

Now, even if it was, no laws have been broken. Tax avoidance is entirely within the law (or rather, within its loopholes). But it would oversimplify the matter hugely to say that this makes it morally permissible. In fact, tax avoidance is selfish and immoral.

Companies that avoid tax aren’t just not paying any more tax than they’re legally obliged to. Conducting business in this country, they’re taking advantage of our stable market infrastructure and largely business-friendly legal system by receiving all these benefits but not paying full whack for them like everybody else does.

Of course, we don’t know for certain whether or not tax is being avoided in this case.
And therein lies the problem: a huge lack of transparency from the University. In an age in which increased transparency is being demanded of politicians, big business, and the banks, we should be just as concerned about our university’s dealings.

I want clarity from the University of York. With regards to who owns our accommodation, with regards to who gets the profits from what we pay to live here, with regards to whom they’re working with, and with regards to exactly how these companies conduct themselves.

And I hope that as their students we won’t let them get away with not providing it.

Then if it should turn out that anything immoral is occurring, I’d hope that York’s students would hold the University to account. If the University is conducting its business in an unscrupulous manner, the fact of the matter is that we pay them, and so I think it’s fair to say that they should be accountable to us.

2 comments

  1. Please stop jumping on the tax avoidance bandwagon.
    It has been going on for years and still will go on, so stop following the media frenzy, as if it is some moral battle you are fighting.

    The government is a form of the mafia, they love to extort money you earned and waste it as they please.

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  2. The moral argument is constantly trotted out by those who agree that avoiding tax by setting up in overseas locations but having assets (of all types, including businesses) in the UK is quite acceptable.

    None of the supporters of schemes such as these has ever been willing to answer the question – if there is nothing wrong with it, why is it not available to small businesses and the man in the street?

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