Overview

The United Kingdom Corporate and Individual Tax and Financial Transparency Bill aims to increase transparency in corporate and individual finances. It mandates the disclosure of financial information from large companies, the publication of tax returns for high-income individuals and top companies, and the revelation of beneficial company ownership, aiming to combat tax evasion and improve financial accountability.

Description

Disclosure of Financial Information by Large Companies

Large companies (as defined by the Companies Act 2006) must disclose extensive financial information about themselves and their related undertakings, including registered names, jurisdictions, turnover, profits, tax liabilities, employee costs, and net assets. This information must be publicly available.

Disclosure of Taxation Information

The bill requires the publication of corporation tax returns for the largest 250 UK companies and the 250 highest-earning individuals. The selection criteria for companies include FTSE 100 membership, UK taxable profits, VAT supplies, and income tax/national insurance liabilities.

Disclosure of Beneficial Ownership

Companies must identify and disclose their beneficial owners (those who ultimately control the company, as defined in the Money Laundering Regulations 2007). This information must be provided to Companies House, and the threshold for reporting ownership has been lowered from 25% to 10%.

Reporting Duties of Financial Institutions

UK financial institutions must report to HMRC and Companies House details of company accounts opened or closed, including the identities of authorized account holders and beneficial owners. Changes to account details must also be reported.

Duties of Companies House

Companies House will publish the information received from financial institutions. If Companies House doesn't receive information within 90 days, it may directly request information from company officers and beneficial owners, making these individuals personally liable for company debts until information is provided.

Duties of HMRC

HMRC will request tax returns from companies and may obtain banking records if information is not provided, making individuals identified under section 5(1)(c) and (d) jointly and severally liable for any tax due.

Obligations of Crown Dependencies and British Overseas Territories

The beneficial ownership disclosure requirements will be extended to entities incorporated in Crown Dependencies and British Overseas Territories, with information published in publicly accessible databases.

Disclosure of Trust Information

UK trusts must register with HMRC, providing detailed information about the trust, its beneficiaries, and financial records. HMRC will publish details of trusts with significant assets or income.

Government Spending

The bill will involve government expenditure on administering the new disclosure requirements, including the cost of creating and maintaining databases and enforcing compliance. Exact figures are not specified in the bill itself.

Groups Affected

• Large Companies: Required to disclose extensive financial and ownership information.
• High-Income Individuals: Tax returns of the top 250 earners will be published.
• UK Financial Institutions: Must report details of company accounts and beneficial owners.
• Companies House: Responsible for publishing disclosed information and enforcing compliance.
• HMRC: Responsible for collecting and potentially publishing trust information.
• Crown Dependencies and British Overseas Territories: Extended beneficial ownership disclosure requirements.
• Trusts: Required to register with HMRC and disclose extensive information.

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