Major SNP donor at the centre of tax haven row

Details of the financial arrangements of Sandy Adam, who has given nearly £100,000 to the SNP and the pro-independence campaign both through his companies and private wealth, came to light after a Sunday Post probe into his dealings in the Isle of Man.

Our investigators discovered that two companies registered in the tax haven – owned by another Isle of Man company the businessman holds shares in – rent out homes and offices across Scotland.

The revelation has prompted concern among opposition politicians and tax campaigners.

Mr Adam’s company, Elgin-based Springfield Properties Plc, was set up in 1956 by Mr Adam’s grandfather.

It has focused on property development since the 1990s, building more than 4,000 homes, and has won the National Home Builder of the Year award three years in a row.

The company has close links with several SNP ministers, including Miss Sturgeon, SNP Westminster leader Angus Robertson and Transport Minister Derek Mackay, and in recent years has been selected to take part in a Scottish Government scheme for first-time buyers.

However, in September the company, which Mr Adam and his wife Anne control, found itself at the centre of a cronyism row over claims it seemed to benefit from its strong links to the government.

Now, according to documents lodged in the Isle of Man, it’s emerged Mr Adam and the Springfield brand has offshore interests.

These include property investment company Springfield Property Fund Plc, based in the island’s capital, Douglas, which lists Mr Adam as one of its shareholders.

Documents also show Innes Smith, MD and director of Springfield Properties Plc in Scotland, is a director.

Another director is Isle of Man-based tax specialist Irene Morrison.

The finance expert – who acts for a variety of companies – specialises in helping businesses set up “bespoke tax-efficient international structures to hold real estate”.

When contacted, she declined to comment on her involvement with Springfield.

Springfield Property Fund Plc also owns two property holding companies based in the Isle of Man – Springfield Commercial Investments Ltd and Heather Ltd.

There is no financial information such as turnover and profits available for either but both list the “parent” company as sole shareholder.

Companies registered in the Isle of Man do not have to file accounts for the public record.

Springfield Commercial Investments – set up in 2010 – owns properties across Scotland, including parts of the Winston Barracks estate in Lanark, South Lanarkshire.

It also has properties in Newton Stewart, Dumfries and Galloway, and Edinburgh, according to Registers of Scotland.

In addition, the company bought a section of Aberdeen’s main shopping thoroughfare, Union Street, last year.

The other company connected to Springfield, Heather Ltd, also owns a section of the street.

Last year Heather Ltd sold various buildings in Falkirk’s town centre to Buckingham-based Sharox Investments Ltd for £1.4m.

Records show the company paid just over £1m for the properties in 2012.

Owning properties through companies registered in tax havens typically allows businesses to reduce their tax bills.

The Isle of Man is one of 38 jurisdictions that were ordered to clean up their tax affairs by the Operation for Economic Cooperation and Development (OECD).

At present the use of offshore companies as vehicles for property ownership and development is not illegal.

However, earlier this month the Scottish Greens pressed for it to be restricted to companies registered in the EU in a bid to exclude tax havens, such as the Isle of Man, and improve transparency.

The move was thrown out by SNP Land Reform Minister Aileen McLeod.

Andy Wightman, of the Scottish Greens, said: “It’s clear a wide range of people are using secret jurisdictions for a variety of purposes, few of which are in the public interest.”

Responding to questions over the revelations, Innes Smith, managing director of Springfield Properties, said: “Springfield Property Fund Plc based in the Isle of Man is an entirely different entity to Springfield Properties Plc.

“It has different shareholders and carries out a different business.

“All activities carried out by Springfield Property Fund Plc in the UK are subject to UK legislation and taxed at the appropriate rates.”

He also said that the Isle of Man companies invested in property to rent out.

He added: “Where there have been joint deals undertaken in the UK, all UK taxes have been and will be paid.”

The UK-based Springfield Properties Plc’s turnover in the year up to May 2015 was £84.2m. Its profits were £2.5 million and its corporation tax bill stood at £555,107.

In the previous 12 months its turnover was £74m, profits £3.2m, and it paid £909,440 in corporation tax.

In its manifesto for last year’s general election the SNP called for a crackdown on tax avoidance and the abolition of non-dom status.

Nicola Sturgeon also described tax avoidance as “obscene, immoral and downright wrong” amid a growing row over offshore firms.

Her MPs have also criticised the so-called “sweetheart” deal between Google and the UK Government, which will see it pay just £130 million to cover a decade of back taxes.

Speaking about the agreement last week the party’s deputy leader, Stewart Hosie, said: “Working people and small businesses do not have the luxury of negotiating down the amount of tax they have to pay.”

These latest disclosures come only weeks after SNP MP Phil Boswell was accused of using a tax loophole for his own benefit while demanding a clampdown on tax dodgers.

Lib Dem peer Jeremy Purvis has accused the SNP of double standards over the issue.

He said: “Cracking down on tax avoidance was a major plank of the SNP’s 2015 manifesto.

“But Phil Boswell’s admission that he used a tax avoidance scheme passed without comment from the First Minister.

“Nicola Sturgeon’s response to this issue has been very weak.”

John Christensen, a former economic adviser to the island of Jersey who is now a director of campaign group the Tax Justice Network, also raised concerns.

Our reporters contacted the SNP but their spokesman declined to comment.

Labour also involved

IT’S not just the SNP who are involved in Springfield’s offshore activities.

Our investigation discovered Scottish Labour’s headquarters in Glasgow is now owned by one of the Isle of Man firms tied to Springfield.

The building at 290 Bath Street is registered to Heather Ltd, according to Registers of Scotland.

The Isle of Man firm bought the building from the union Unite in 2011 for £810,000.

A spokesman for Scottish Labour refused to say how much rent it had paid to the offshore company, citing “commercial reasons”.

It has been reported Scottish Labour are considering moving the party’s headquarters to Edinburgh.

Labour has been housed in Glasgow for decades.

However, the split between party HQ in Glasgow and the MSP group in Holyrood is believed to have created tensions and turf wars within the party.

Isle of Man sets out its own rules

The Isle of Man is in the Irish Sea, roughly equidistant from England, Ireland, Scotland and Wales.

It is not part of the United Kingdom or European Union, but its inhabitants are British citizens, as it’s deemed a possession of the Crown.

The island has its own government, Tynwald, which was established by the Vikings more than 1,000 years ago.

In the 1960s it recast itself as an offshore tax haven by slashing corporation tax and setting an income tax cap on billionaires. While its prospects improved as a result, the island’s relationship with the UK went in the opposite direction.

It came to a head in the early days of the financial crash when then Chancellor Alistair Darling called on the UK Treasury to take “a long hard look at the relationship with the Isle of Man, a tax haven sitting in the middle of the Irish Sea”.

The IOM has since introduced regulations to increase transparency.

All parties hit by rows over offshore cash

It seems no party is safe from tax haven donor rows.

The Tories and Liberal Democrats have had their fair share in recent years.

In 2013, then Deputy Prime Minister Nick Clegg was criticised over plans to give a peerage to one of the Lib Dems’ main donors, Rumi Verjee. The Ugandan-born tycoon, dubbed “Lord Pizza” after bringing the Domino’s Pizza chain to Britain, had given the party £770,000.

Despite his links to a number of offshore firms, Lib Dem high command put him forward for a peerage.

Clegg and senior colleagues had previously criticised business people who operate offshore.

And it was alleged in 2010 that one of the Tory’s biggest donors – Lord Ashcroft – deprived the public of more than £127 million in a decade-long tax dodge.

Despite being made a Tory Peer in 1999, the billionaire continued to be officially based in Belize, meaning he escaped paying tax here.

The row led him to fall out with friend David Cameron.