Today’s tax professional operates in a challenging world, characterised by uncertainty, complexity and increasing scrutiny. Governments continue to balance the need to raise revenues with the desire for a tax regime which attracts and retains business and encourages it to grow. A broad range of stakeholders are asking whether companies are paying their ‘fair share of tax’ and there has been a decline in public trust, particularly in large business.
Can greater transparency rebuild trust? It is clearly important to consider the strategic response to this challenge and this will differ between companies. The report looks into the UK requirements for a public tax strategy, the latest developments in country-by-country reporting, how tax is linked to other areas of reporting (the business model and as a principal risk) and a strategic response to tax transparency. We summarise the background to the mandatory requirements for tax transparency and then provide examples of how companies are responding, using voluntary tax disclosures to tell their story. As always, there is a range of approaches and it's important to consider the value that increased transparency will bring. For some companies, where the business case is insufficient, there will be little activity in this area. Others however have dedicated time and energy to developing voluntary disclosures and driving the debate on tax transparency forward and we salute their efforts.
The report also has useful insights into our latest review of the tax reporting of all the companies in the FTSE 350. We have included extracts of the leaders in tax reporting.
2016 trends in voluntary reporting - the report shows a number of companies in the FTSE 100 are making more extensive disclosures to present their own view and aid a better understanding of their tax affairs, while others are taking the first steps on their transparency journey.