FTSE firms become more transparent about their tax affairs

More than half of FTSE 100 companies now disclose information about their approach to tax, a PricewaterhouseCoopers (PwC) June 2015 report shows. The analysis of annual reports, corporate websites and other social responsibility reports, reveals a steady increase in tax transparency across big business. In 2012, just 32 firms in the FTSE 100 provided information on issues such as their attitude to tax planning and relationships with tax authorities. The number jumped to 49 in 2013, and has now risen to 56, according to the most recent 2014 data.

Andrew Packman, tax partner at PwC, said:

“Corporates recognise that people want to know where the company stands on tax. Already this year two tax questionnaires have been sent to the FTSE 100, one from an investor, the other from an NGO. The interest in tax is undeniable and it’s helpful to be able to point interested parties to existing public disclosures.”

The report shows that there’s no set approach to what’s disclosed and how it’s done. However, there’s been an increased focus on tax risks, such as whether tax strategy is reviewed at board level. Fifty firms now set out their tax risk and governance procedures, 13 more than the previous year. It’s also become more common for companies to quantify all the taxes they bear and generate – the total tax contribution – which is now published by 40 firms, up 16 on 2013.”

Mr Packman added:

“It’s hard to have a generic approach to disclosure, as what’s relevant will vary for stakeholders in different companies. But with greater reporting requirements soon coming into force, the transparency tide is going in one direction. Being clear on your approach and pulling together relevant and meaningful information makes a lot of sense.”

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