Press Room

4 Feb 2022

The 3 P’s – Spot the Difference


Tax Investigations Partner Andrew Park examines the differences and similarities between the Panama, Pandora and Paradise Papers.

I’m often asked whether there’s any difference between the various offshore leaks (otherwise known as the 3P’s – Panama, Pandora and Paradise).

The thing that really distinguished the “Panama Papers” from the “Paradise” leaks was that the Panama Papers provided complete transparency on a lot of obvious wrongdoing, whereas the Paradise Papers involved the leak of data from a reputable international law firm going about trying to do things properly. Now, notwithstanding the legitimacy of the planning and structures revealed by the Paradise Papers, the public didn’t necessarily like that Sir Lewis Hamilton achieved significant VAT savings on his use of a private jet even though the planning wasn’t illegal.

I know that Miles Dean, our Head of International Tax has spoken to journalists from across the political spectrum over the years wanting him to confirm that what they thought might be illegal was illegal – only for him to explain it was legitimate planning. I doubt much, if anything, ultimately emerged from the Paradise Papers (Appleby being the law firm in question) that wouldn’t similarly have emerged if the data had been leaked from one of the large London international law firms.

The Pandora Papers are a bit less clear because this leak only recently happened and apparently involves a mixed bag of 14 different firms – who may well have acted very differently from each other – maybe some with complete propriety and maybe some not. It’s very interesting that the ICIJ is still apparently being very cagey about which firms are involved and where the data came from.

ICIJ journalists now seem to conflate information in the hands of their journalists and made public by them with the wider (and often similar) information now in the hands of global enforcement bodies like HMRC. Although the likes of HMRC now have a lot of information they wouldn’t otherwise have because of leaks like the Paradise Papers, journalists don’t seem to appreciate how much information HMRC receives about the ownership of overseas companies, for example, by virtue of their access ownership registers in crown dependency “tax havens” (that journalists don’t have access to).

Journalists should also appreciate that they can’t expect to have a window on what HMRC does with the information. Most tax investigations, including those conducted into offshore matters, happen in total privacy between HMRC and the taxpayer. Normally they lead to tax settlements that remain totally private unless a tax dispute reaches the courts, or details require disclosure in some sort of public forum like a divorce court. So, the ICIJ may have lit a fire under some people, but that hasn’t resulted in their problems becoming public and potentially the press turning it into a public spectacle / public entertainment.

Tax is a matter of law and very often not as clear cut as journalists and the public might imagine, particularly where complex international structures are concerned. The press and the public should appreciate that the normal level of privacy with which UK tax investigations are conducted is conducive to the public good in preventing grandstanding and encouraging both sides to be reasonable and pragmatic rather than risk a public dispute in the courts that either side might unexpectedly lose, or which might embarrass the taxpayer or create unhelpful legal precedents for HMRC.

Please contact Andrew Park for additional information with respect to this article.


Andrew Park

Andrew is the Tax Investigations Partner at Andersen LLP. He specialises in providing solutions to tax problems and resolving investigations and voluntary disclosures with HMRC.

Email: Andrew Park