Coming soon: the UK Corporate and Individual Financial Transparency Bill

Posted on June 21 2013

Many will know that I worked with Michael Meacher MP last year to table the General Anti-Tax Avoidance Principle Bill that would have beaten tax avoidance in the UK so much ore effectively than the government's lame General Anti-Abuse Rule will ever do.

Now Michael has won a place in the private member's ballot again this year and has as a result tabled a new bill:

UK Corporate and Individual Financial Transparency Bill

Bill to require disclosure of various financial information by large companies; to provide for disclosure of beneficial ownership; to require banks to disclose to HMRC the identity of certain companies holding bank accounts; to require the publication of the tax returns of individuals with an income of more than a certain level and the largest 250 UK companies; and for connected purposes.

I look forward to seeing the new Bill in due course. It should be tabled by 18 July.

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2 Responses

  1. Richard Baron says:
    June 22 2013 at 10:03 am

    Much has been written on this topic, Richard, and you probably already have a thick file of academic papers. But for the benefit of others, I just came across this interesting paper, which considers some pros and cons, in an American context, and also has lots of references to other material (only the fourth of the four proposals in the paper is about publicity in the sense of disclosing taxpayer information):

    Marjorie E. Kornhauser, “Doing the Full Monty: Will Publicizing Tax Information Increase Compliance?”, Canadian Journal of Law and Jurisprudence, Vol. 18, No. 1, January 2005, available for free download at:

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=712061

    We must wait to see what the bill says, but if it does get enacted, the first thought of some will be, “How can we get round this?”. One would need some way to deal with putting the part of a business that pays a very low effective rate in a group company that does not need to file in the UK, and with the individual who holds investments through non-UK entities that are detached enough from the individual to leave no trace on his or her UK return.

    There is also the question of what gets published. If it is only the return, the figures in the boxes may hide a wealth of detail, and the return may not even mention amounts that are covered by exemptions, even if the exemptions were obtained through pretty aggressive tax avoidance. If it is the return plus all supporting schedules and computations, plus documentation on all amounts that are covered by exemptions, that is better. If it is all of this, plus the tax position as finally agreed, following negotiations with HMRC, better still.

    Finally, I note that individuals will be caught if their income exceeds a certain level. That will presumably be income in its everyday sense, including gains, not income for tax purposes, otherwise someone with income of £1m and clever tax wheezes to bring the taxable amount down to £50,000 would escape, when that is precisely the sort of person the proposal seeks to expose.