Overview

The Tax and Financial Transparency Bill aims to improve the UK's ability to collect tax revenue by increasing transparency in financial dealings. It mandates the Secretary of State to secure tax information exchange agreements with British Overseas Territories and Crown Dependencies, and requires UK financial institutions, companies, and certain trusts to disclose tax information.

Description

This bill introduces several key measures:

• Secretary of State's Duties: The Secretary of State must work to establish Tax Information Exchange Agreements (TIEAs) with all British Overseas Territories and Crown Dependencies (Jersey, Guernsey, Isle of Man). Annual reports to Parliament on progress will be required.
• Duties of Financial Institutions: All UK financial institutions must report any breaches of TIEAs to Her Majesty's Revenue and Customs (HMRC).
• Financial Transparency for Companies and Trusts: All UK companies must publicly disclose comprehensive information about their tax payments worldwide. The Secretary of State will define which trusts and other bodies will also be subject to this requirement via regulations.
• Penalties: The Secretary of State will set penalties for non-compliance with sections 2 and 3 (financial institutions and company/trust transparency) via statutory instrument, subject to parliamentary approval.

Government Spending

The bill doesn't directly specify government spending figures. However, the costs associated with implementing and enforcing the legislation (including potential legal challenges), as well as increased HMRC staffing, are likely to increase government expenditure. Conversely, increased tax revenue from improved transparency could offset these costs.

Groups Affected

• British Overseas Territories and Crown Dependencies: These jurisdictions will face pressure to cooperate with the UK on tax information sharing.
• UK Financial Institutions: Banks and other financial institutions will have increased reporting burdens and potential liabilities for non-compliance.
• UK Companies: Companies will face new requirements for publishing their tax information globally, potentially increasing administrative costs.
• Trusts and other bodies (as defined by the Secretary of State): These entities will face similar disclosure requirements to companies.
• HMRC: HMRC will be responsible for enforcing the new regulations, requiring additional resources and potentially leading to increased enforcement actions.

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