TAX STRATEGY REPORTING AMONG THE FTSE 50- Slow to emerge, poorly executed, but some examples of excellence

30 Oct

TAX STRATEGY REPORTING AMONG THE FTSE 50- Slow to emerge, poorly executed, but some examples of excellence

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Poll after poll shows that tax avoidance is the number one concern of the UK public when it comes to corporate conduct. Without doubt, how a company deals with its tax affairs is key to its reputation. This creates enormous corporate risks, but opportunities also.

Across the globe, a wide range of stakeholders are calling for radical improvements in tax transparency by big business. It is widely understood that tax helps to fund vital public goods and services and when paid fairly, it ensures a level playing field for businesses large and small. In the UK, in a significant development, Schedule 19 of Finance Act 2016 requires thousands of businesses to publish their UK Tax Strategy annually (before the end of their first financial year commencing after 15th September 2016). In a world where trust is at a premium (especially when it comes to big business paying an appropriate amount of tax), companies need to report on their tax practices openly and honestly. This will help stakeholders to understand the contribution businesses are making (or failing to make) and why.

This report analyses how the top 50 companies of the FTSE 100 (ranked by market capitalisation; hereafter ‘FTSE 50’) have responded to the new legislation, as at 30th June 2017 (the cut-off date for the purposes of our study). We have ranked companies on a scale of zero to five. As well as rating basic legislative compliance, we assess the degree to which these FTSE 50 companies provide clarity on a number of other best practice indicators in tax reporting, including their approach to (and use of) tax havens, the provision of public country-by-country reporting of economic activity and the degree to which the Tax Strategy covers global
operations.

 

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