BRITAIN’S largest listed companies are becoming more transparent about their tax affairs, with almost half of the FTSE now disclosing information on their overall approach to tax, a report by PwC has found.
As well as information on tax policy, companies are making disclosures about the range of taxes they pay. With corporation tax no longer the largest tax borne by businesses, 24 companies are now reporting details of other taxes borne and collected besides corporation tax, compared with 19 the previous year.
Andrew Packman, tax partner at PwC, said companies are starting to see the benefit of voluntary disclosure of all taxes.
“It is total taxes that governments are interested in to fund public spending, not corporation tax alone, so it makes sense to provide the full picture,” Packman said.
The report also found that geographical reporting is now on the agenda of the UK’s biggest companies, with a number of mandatory requirements already in place. Some 22 FTSE 100 firms now provide some breakdown of taxes around the world, either by region or by country, compared with 17 the previous year.
“While we are seeing more firms reporting taxes around the world, it’s important to bear in mind that some companies operate almost entirely within the UK. A business may choose not to give a global breakdown of taxes because it would be meaningless,” Packman added.
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal
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