7 September 2015 - MPs should be emboldened by a new survey of FTSE100 companies which finds only a small minority say they would actively oppose the introduction of new legal requirements to reveal more about their finances, Christian Aid says today.
The UK House of Commons will tomorrow (Tuesday) begin debating legislation to implement the Budget. As part of that, MPs are expected to discuss a reform to make companies publicly reveal more about their finances.
“We hope MPs will take courage from our new survey and make a small but powerful change in the law,” said Joseph Stead, Senior Economic Justice Adviser at Christian Aid.
“Ensuring that big companies reveal enough about their activities for others to spot potential tax dodging could bring in extra billions for the UK and developing countries.”
In its election manifesto, the Conservative Party pledged to ‘consider’ the reform in question: public country-by-country reporting. It involves companies publicly revealing information such as profits made, taxes paid, and turnover and staff numbers separately for every country in which they operate.
Christian Aid’s new survey of FTSE100 companies suggests that a large majority of companies would not actively oppose the introduction of a legal requirement for them to make their country-by-country reports public, while some would actively support it.
“Given the UK and developing countries’ urgent need to catch up with multinational tax cheats which are getting away with billions, there is no time like the present,” added Mr Stead.
“There is growing acceptance, including from auditors such as KPMG, that public disclosure of this data is inevitable. Investors want it, and FTSE100 companies will soon have to declare such details to the UK taxman, so publishing it makes little difference to companies unless they have something to hide.
“Most companies say they are committed to tax transparency but there is a wariness about voluntarily revealing more. What companies seem to want is a level playing field across the UK and European Union - and only a legal requirement can provide that.”
For its survey, Christian Aid wrote to all 100 companies in the FTSE100 share index, asking about their views on country-by-country reporting.
Christian Aid has campaigned for the reform since 2008 because it would help to expose and deter the multinational tax dodging which drains billions from developing and other countries every year. It would also help in holding governments accountable for the impact of their tax policies.
A total of 54 companies responded to the survey. Asked about their willingness to publish voluntarily the country-by-country reports that the law will already require them to provide to the UK tax authority from 2017, six per cent (three firms) said they already did disclose such information, were planning to or were willing to disclose; 15 per cent (eight) said they were considering further voluntary disclosure.
Christian Aid also asked FTSE100 companies about their attitude towards the prospect of a new legal requirement for them and other major firms to reveal publicly their country-by-country reports. Seven per cent (four companies) actively supported the idea and thirty-one per cent (17 companies) said they were committed to obeying any new legal requirement, although they did not comment on the prospect.
A further seventeen per cent expressed negative views towards the prospect of the reform while seventeen per cent referred to alternative reporting requirements and twenty eight per cent did not express an opinion.
For more information please contact Rachel Baird on 00 44 (0)207 523 2446 or email@example.com or 24 hour press phone: 07850 242950
Notes to editors:
1. Christian Aid works in some of the world's poorest communities in around 40 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.
2. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, sustainably. Our strategy document Partnership for Change explains how we set about this task.
3. Christian Aid is a member of the ACT Alliance, a global coalition of more than 130 churches and church-related organisations that work together in humanitarian assistance, advocacy and development. Further details at http://actalliance.org
4. Follow Christian Aid's newswire on Twitter: http://twitter.com/caid_newswire
5. For more information about the work of Christian Aid visit http://www.christianaid.org.uk