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Britain to 'sweep away' tax secrecy - David Cameron Britain to 'sweep away' tax secrecy - David Cameron
(about 5 hours later)
The government will "sweep away" tax secrecy by forcing so-called shell companies to declare who makes money out of them, David Cameron has said. =The government will "sweep away" tax secrecy by forcing so-called shell companies to declare who makes money out of them, David Cameron has said.
The prime minister told the Guardian that "secretive companies in secretive locations" were used to avoid tax.The prime minister told the Guardian that "secretive companies in secretive locations" were used to avoid tax.
Businesses would have to have adequate, accurate and current information registered at Companies House by law. He is also due to meet the leaders of Britain's Overseas Territories and Crown Dependencies to urge them to be more open about their tax affairs.
Tax evasion and avoidance may be a key issue at the G8 meeting of world leaders in County Fermanagh this week. Tax evasion and avoidance will be discussed at the G8 meeting next week.
'Shadowy' firms Ahead of the G8 in County Fermanagh, the government has announced plans to require all British firms by law to register details of their ownership and beneficiaries with Companies House.
In an interview, Mr Cameron said: "We need to know more about who owns which company - beneficial ownership - because that is how a lot of people and a lot of companies avoid tax, using secretive companies in secretive locations.
"The way to sweep away the secrecy and get to the bottom of tax avoidance and tax evasion and cracking down on corruption is to have a register of beneficial ownerships so the tax authorities can see who owns beneficially every company."
The prime minister described such shell companies as "shadowy".
The register would be available only to authorities such as HM Revenue and Customs in the first instance but the government would consult on making it public.The register would be available only to authorities such as HM Revenue and Customs in the first instance but the government would consult on making it public.
Mr Cameron said he would like the register to be available to everyone but "I do not want to disadvantage Britain by doing something others won't do". Mr Cameron said he would like the register to be available to everyone but added: "I do not want to disadvantage Britain by doing something others won't do."
At summit talks in Brussels last month, EU leaders said they were committed to tackling tax evasion. 'Tax havens'
European Council president Herman Van Rompuy said there was a "strong political will" in Europe to make tax systems fairer. Treasury Chief Secretary Danny Alexander told the BBC ministers hoped that other countries would be prepared to create - and share - their own registers of beneficial ownership.
A key goal was to prevent multinational firms exploiting legal loopholes on tax. "The goal here is to have an international tax system that ensures that there aren't places where secretive corporate structures can hide their money from the tax authorities," he said.
British territories "It's critically important that we have transparency about who owns companies and who are the ultimate beneficiaries of any given corporate structure."
Mr Cameron is expected to ask leaders including US President Barack Obama and German Chancellor Angela Merkel to sign up to a new set of core principles on tax at the G8 summit at Loch Erne. Mr Alexander said such transparency would be "very powerful" and would enable the government to recoup more tax.
Forty-eight hours before the meeting the prime minister will call on businesses, governments and society in general to back the G8's priorities, under its UK presidency, aimed at boosting jobs and growth and reducing poverty. Alongside the new register, the government is also continuing to push for automatic information exchange with Britain's Overseas Territories and Crown Dependencies.
Mr Cameron will also tell the leaders of Britain's Overseas Territories and Crown Dependencies to clamp down on tax evasion and aggressive tax avoidance when they meet in Downing Street before the Prime Minister flies off to Northern Ireland. Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man are all expected to be represented at Saturday's meeting at No 10.
Places such as Bermuda, Gibraltar and the Isle of Man will be represented at the meeting. Many of the islands and outposts are regarded as tax havens, although that is a label they strongly dispute.
Richard Murphy, director of Tax Research UK, told the BBC how automatic information exchange would work.
"If, for example, you had an account in Jersey... Jersey would have to tell the UK you've got it and how much income you earn on it automatically, without your consent."
But he added: "Let's be honest, tax havens deliberately disguise who has accounts in their jurisdictions, whether that is individuals by some form of banking secrecy or companies through the use of trusts and offshore companies."
Jersey, Guernsey and the Isle of Man have already agreed to some information sharing with the UK, but not all other countries.
The prime minister will urge the leaders to sign up to the Multilateral Convention on Mutual Assistance in Tax Matters - an initiative led by the Organisation for Economic Cooperation and Development (OECD).
Bermuda said on Thursday it had agreed to back the OECD treaty, which is already signed by more than 50 countries.
'Through persuasion'
Labour leader Ed Miliband said Mr Cameron must be prepared, if necessary, to get tough with any territories or dependencies which refuse to comply with the UK's demands.
"Britain, which has responsibility for arguably the biggest network of tax havens in the world, needs to use all its considerable legal power and authority to ensure all the UK overseas territories and Crown dependencies which act as tax havens sign up," he said in an article for The Independent.
Asked about the possibility of imposing such requirements, Mr Alexander said: "I think it's better to do it through persuasion... but look, if in the end it comes to that, I dare say we would consider it."
Christian Aid has said that banking practices in tax havens linked to the UK are costing the world's poor billions of pounds.Christian Aid has said that banking practices in tax havens linked to the UK are costing the world's poor billions of pounds.
In a report, the charity said the territories were the largest source of investment to developing countries. In a report, the charity said the territories were the largest source of investment to developing countries, but these nations were losing tax worth £100bn a year because of the way money was moved through havens.
But it estimated that these nations were losing tax worth £100bn a year because of the way money was moved through havens. At summit talks in Brussels last month, European Council president Herman Van Rompuy said there was a "strong political will" in Europe to make tax systems fairer and prevent multinational firms exploiting legal loopholes.
Christian Aid called on Mr Cameron to tighten financial controls on the UK's territories. Mr Cameron is expected to ask leaders including US President Barack Obama and German Chancellor Angela Merkel to sign up to a new set of core principles on tax at the G8 summit at Loch Erne, which starts on Monday.