Partner Article

Companies need to shine light on tax affairs

Companies should acknowledge public will, and make their tax affairs more transparent, suggest Ernst & Young.

The firm’s latest Tax Transparency Report calls on businesses to build trust among stakeholders and within the wider economy by presenting tax processes.

It says the public’s expectation has raised since the furore around several multinationals tax affairs, and the notion of “fair tax” is important.

Ernst & Young also note that greater tax transparency also brings with it the risk of divulging commercially sensitive information, and therefore warns against a ‘one size fits all’ approach.

John Dixon, head of Tax at Ernst & Young, said: “It’s clear to us that the UK has reached a tipping point and organisations can no longer ignore the calls for greater disclosure.

“Greater transparency provides an opportunity for companies to tell their stakeholders, from their customers, to politicians and shareholders, about their tax policies and their contribution to the economies in which they operate.

“We are actively advising our clients to embrace the issue proactively, rather than waiting for legislation to be imposed.”

Mr Dixon suggested that without a level of voluntary take-up among businesses, a mandatory requirement could be introduced.

He added: “We aren’t in favour of a one size fits all approach. The concept of tax transparency will mean different things for different organisations.

“Companies will need to form their own views on additional voluntary disclosure and how to get their messages across appropriately.

“But we are confident that the benefits of building greater trust with stakeholders will far outweigh the cost and resources needed for greater tax transparency.”

This was posted in Bdaily's Members' News section by Tom Keighley .