Partner Article

UK creates transparency benchmark against which other countries will be judged

As the summer holidays came to an end a few weeks ago, in Baker Tilly’s Weekly Tax Brief we predicted a renewed emphasis on combating tax evasion as a means to boost the Exchequer’s revenues. We hesitate to say so, that how right we were!

Looking at abuses of the tax system more widely, I have also expressed concerns that nations’ networks of tax treaties may unintentionally be creating conduits for the proceeds of crime.

After much debate around the transparency of company ownership, a debate which encompassed the OECD and recent meetings of the G8 and the G20, today’s statement by UK Prime Minister David Cameron marks a welcome and definite step forward.

At the Open Government Partnership Summit in London the Prime Minister announced that the UK is to go ahead with creating and publishing a list of the beneficial owners of companies.

Whether the list was to be published or not, the UK authorities had already committed to use it, among other things, in their fight against tax evasion and tax avoidance. By choosing to make the information freely available to the public, the Prime Minister foresees benefits for:

- UK businesses, who will be better able to identify the true owners of the companies their trading with;

- developing countries.

Then of course there is the major benefit that public access removes suspicions of cosy deals and the authorities turning a blind eye to certain arrangements. This carries with it the attendant risk that some innocent companies may be wrongly criticised for apparent tax malpractice, but the Prime Minister clearly regards such collateral damage as a risk worth taking.

By being first in the current debate to maintain and publish a register of the beneficial ownership of companies, the UK will not on its own succeed in achieving global change. Nevertheless, it does create a benchmark against which other countries will be judged.

This was posted in Bdaily's Members' News section by George Bull .