Overview

The Tax and Financial Transparency Bill aims to increase transparency in UK finance by requiring banks, companies, and trusts to disclose more information about their financial activities and tax payments across different jurisdictions. This includes reporting account details, beneficial ownership, and a jurisdictional breakdown of income and tax liabilities.

Description

This bill mandates several key actions:

• Bank Account Reporting: UK financial institutions must report the opening and closing of accounts held by UK limited liability companies, partnerships, and similar entities to HMRC and Companies House within 30 days.
• Companies House and HMRC Duties: Companies House will record account information, preventing company dissolution while accounts remain open. HMRC will request corporation tax returns from companies with UK accounts. If information is not forthcoming, financial institutions must provide Companies House or HMRC with details on the entity's address, beneficial owners, and directors.
• Financial Transparency for Companies and Trusts: Companies operating in the UK must publicly report a jurisdictional breakdown of their consolidated turnover, profit, tax liability, and payments in their annual financial statements. Similar reporting will apply to trusts and other bodies as defined in future regulations.

The Secretary of State will issue regulations to implement these requirements, including penalties for non-compliance, which will need parliamentary approval.

Government Spending

The bill will lead to increased government expenditure on implementing and enforcing these new regulations. Specific figures are not provided in the bill itself, but the cost will include resources for HMRC and Companies House to process the additional information and potentially for investigations into non-compliance.

Groups Affected

• UK Banks: Required to report account information to HMRC and Companies House.
• UK Companies and Partnerships: Must provide corporation tax returns and may need to supply additional information to HMRC or Companies House if they fail to comply.
• Trusts and other designated bodies: Subject to increased transparency requirements regarding their financial activities.
• HMRC and Companies House: Will have increased responsibilities for processing and managing the additional data.

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