Scottish Liberal Democrat justice spokesman Liam McArthur MSP today called for an urgent review of the regulation of Scottish Limited Partnerships (SLPs) after it was revealed the controversial business model was at the heart of a Ukrainian probe into organised crime arm exports.
These revelations follow reports that SLPs are being marketed as tax avoidance vehicles in Eastern Europe. SLPs, which were first established in a century-old element of Scots company law, are not required to register for tax or provide full financial reports in Scotland.
Mr McArthur’s calls come days after the Prime Minister indicated that the UK government is planning a new crackdown on tax avoidance.
Commenting, Mr McArthur said:
“Red flags have been raised repeatedly over the role of SLPs in transferring money out of Eastern Europe with no questions asked. Now this murky legal vehicle has been implicated in a probe into organised crime and arms deals.
“The English and Scottish Law Commissions have long recommended reform of SLPs. We now need to see action taken. Scotland’s reputation as a place to do business is on the line here. The last thing we want is for Edinburgh or Glasgow to become the Panama of the north.
“The Cabinet Secretary for justice has confirmed he is open to reviewing the role of SLPs and the UK government say that they are planning a crackdown on tax avoidance. They need to work together to boost transparency and ensure that SLPs cannot be abused.”