This bill goes right to the heart of the economic issues facing our country. If the Government was serious about protecting the most vulnerable people in our communities from the cuts, it would start investing in tax collection and proper regulation so that companies are not allowed to simply disappear without paying the taxes they owe.
The first aim of this Bill is to tackle the scandalous reality that around 500,000 companies every year appear not to be paying tax in the UK. Tax Research UK estimate that regulatory failures by H M Revenue & Customs and Companies House mean that around 500,000 companies a year fail to pay their tax or file their accounts.
A great many are simply struck off the Register of Companies as a result, never to be heard of again. It is thought that up to £16 billion of tax a year might be lost to the country as a result. This Bill would ensure that banks have to provide details on all accounts they maintain for companies operating in the UK so that H M Revenue & Customs and Companies House can chase those companies who do not file the returns they're obliged to make for the missing information - and the tax they owe.
Secondly, the bill would force companies to 'publish what tax they pay', requiring all companies filing accounts in the UK to include a statement on the turnover, pre-tax profit, tax charge and actual tax paid for each country in which they operate, without exception.
If they only trade in the UK, this has no impact on them. This information would, however, mean that the answers to the questions asked of Barclays Bank earlier this year about where it earned its profits, how much profit was recorded in tax havens, and where it paid its taxes could be answered for all companies trading internationally.
Caroline's Tax and Financial Transparency Bill will feature as the main topic of discussion in BBC Radio 4's Decision Time programme tonight (8 June 2011) at 8pm with Nick Robinson. Caroline will be joined in the debate by former Trade Minister Lord Digby Jones, Sir Nicholas Montague, former head of the Inland Revenue, Michael Jacobs, a former special adviser in the Treasury and Number 10, and Fraser Nelson, editor of the Spectator. The programme will be available to listen again here: http://www.bbc.co.uk/programmes/b011pkqnThis information is vital if we are to ensure that multinational corporations make a fair and proper contribution to our society. Companies cannot opt out of corporate social responsibility - and paying tax to the country that provides them with their opportunities to trade is an essential part of it. You can't be socially responsible and accountable unless you say where you are and what you do in each place that you trade.