Tax strategy disclosures among FTSE 100 approaches 60%

More than half of FTSE 100 companies (59%) have published a tax strategy as part of their annual report, according to analysis published by Deloitte

The firm’s analysis of FTSE 100 tax disclosures, which looks at tax transparency trends in the largest companies’ annual reports, found that out of the 94 companies with a year-end of 31 December 2016 or later, 59%, or 55 companies, have disclosed some form of tax strategy statement.

That represents a marked increase on previous findings from the Fair Tax Mark and the Local Authority Pension Fund Forum (LAPFF) in October 2017, which found only a third (34% or 17) of the top 50 FTSE companies it looked at had published a tax strategy online resembling that required by the new law by 30 June 2017. The remaining 33 were non-compliant and achieved a score of zero, meaning that no tax strategy had been published online by the cut-off date for the study.

Deloitte found that of those strategies that were published, 64% (35 companies) made a stand-alone statement while 36% (20 companies) included the strategy in their annual report. The majority of businesses disclosing their tax strategy made a global statement (75%), reflecting the scale of their organisations.

While 55% of businesses emphasised the tax contribution they made and provided headline values, most (84%) steered clear of providing detailed country-by-country analysis. Moreover, tax strategies were typically concise - half of them (28) were summarised in less than a page, while only nine companies wrote more than four pages.

The government introduced a package of measures in September 2016 requiring many large businesses and partnerships to publish a UK tax strategy by the end of their next financial year, which is 31 December 2017 for those with a calendar year-end.

Mark Kennedy, partner in Deloitte’s tax management consulting group, said: ‘All FTSE 100 businesses can expect to be in the scope of the legislation, and as of November nearly 60% had already published their strategy. Other companies are likely to try and gain visibility on trends, conventions and the public response to those trends before making their strategy public.

‘While it is not yet a legal requirement for all companies to have disclosed their tax strategy, we are already seeing a lot of interest from HMRC as to the nature of these statements and how the principles expressed in them are embedded within the organisation.’

Report by Calum Fuller

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