THE UK Government has finally caved into pressure from the SNP and agreed to undertake a review of limited partnerships, including Scottish Limited Partnerships (SLPs).

The U-turn, announced last midweek, follows a campaign led by the SNP’s Treasury spokesperson Roger Mullin MP, The Herald newspaper, sister paper of the Times, and Oxfam Scotland, to secure a review into the use of SLPs for criminal activity and tax evasion. 

SLPs are a vehicle for business registration that have their own legal personality, anonymity of ownership, and lax reporting restrictions.

SLPs that do not operate in the UK do not have to pay tax or file accounts. While some SLPs are used for legitimate business purposes, from private equity to property structures, many are linked to widespread and damaging criminal networks, including major international corruption scandals, such as links to a digital bootlegging case in the USA worth US$1BN, and child pornography websites.

There has been a recent increase in the registration of SLPs – with around 25,000 now registered at Companies House – and the International Monetary Fund has warned that SLPs pose a real threat to combatting organised crime and money laundering. While the Scottish Government has also called for a review into their use, powers over SLPs remain reserved to Westminster. 

The SNP attempted to introduce a new clause into the Finance Bill in August, calling on the UK Government to investigate SLPs, but the amendment was voted down by Tory MPs.

SNP MPs have kept up the pressure since then, and SNP Westminster Leader Angus Robertson raised the issue at Prime Ministers Questions in November.

Commenting Roger Mullin MP said: “This is a welcome U-turn from the UK Government who have finally caved into months of pressure from the SNP to carry out a review into the links between SLPs and criminal activity.

“Having previously rejected and voted against our calls for an investigation, this change of heart from the UK Government is a step in the right direction, and a victory for the SNP and all those who have campaigned on this issue.

“We know that the links between SLPs and criminality pose a threat to combatting organised crime. Understanding the scope, scale and extent of the criminal links with SLPs is the only way in which we can move forward to a practical and effective solution.

“While we are pleased with this development, it is merely the first step. The SNP will submit a series of new clauses to the upcoming Criminal Finance Bill, which will aim to hold the UK Government to account on their commitment to shine light into this murky world, and deliver on their promise.”