On 21 April, the UK Department of Business, Innovation & Skills (BIS) announced a series of measures aimed at addressing tax evasion and money laundering. These measures echo the G8 pledges on tax transparency made by Prime Minister David Cameron at the G8 Summit in June 2013.
In its Communiqué, the G8 agreed to publish national actions plans setting out concrete steps to counter money laundering and tax evasion. This would include measures to ensure transparency on beneficial ownership of companies, such as a central registry of information.
In follow-up to the UK's action plan, BIS has confirmed plans to introduce a public register. It will contain details of individuals who hold more than 25% shareholding or voting rights, or who otherwise exercise significant control over the company. Companies will be required to provide information to ‘Companies House’, a BIS agency tasked with examining and storing data under relevant corporate legislation. This information will have to be annually updated by companies.
In addition, the Government intends to abolish physical ‘bearer shares’, which are susceptible to abuse. Bearer shares are freely transferable and any person possessing such shares is presumed to be the owner, without being listed as such in the company’s register of members. Consequently, there is a risk that bearer shares are repeatedly transferred, with the true shareholders often not being traced. The Government has proposed exchanging all bearer shares for ‘registered shares’, whose ownership details are accurately captured in the company’s register. When implemented, this step ought to minimise significantly the potential for misuse.
Business Secretary Vince Cable stated that “the UK is already [one] of the best places in the world to start, grow and run a business. However, for consumers, investors and the wider public to really trust a company they need to know who is really in charge”.
Ahead of the 2013 G8 Summit, UNA-UK wrote an open letter to the G8, urging them to adopt strong measures on ensuring tax transparency. In particular, UNA-UK called on “G8 leaders to develop further measures, both legal and voluntary, to combat tax avoidance”. Executive Director Natalie Samarasinghe said: “We are encouraged by these plans, which we hope will not only make it harder for companies to exploit the system but also act as a deterrent."
Click here to read the BIS press release
Click here to read the UK national Action Plan
Click here to read UNA-UK’s letter to G8 leaders
Click here to read UNA-UK's analysis of the tax pledges made at the G8 Summit in 2013
Photo: Business Secretary Vince Cable, ©Chatham House/ Wikimedia Commons
