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Could the UK project positive values on financial transparency?

Article by Alex Cobham, Andres Knobel and Robert Palmer

December 3, 2020

Could the UK project positive values on financial transparency?

The global pandemic has put pressures on public services and on government revenue streams all around the world. Immediate measures being discussed include wealth taxes on those most able to contribute, and excess profits taxes on the few businesses that have benefited from state interventions to protect public health, such as Amazon. Underpinning such measures, and future possibilities for both revenue-raising and ending impunity for corruption, is the agenda for financial transparency and integrity.


The State of Tax Justice 2020 report identifies global revenue losses of $427 billion, due to the combination of corporate profit shifting and offshore tax evasion by individuals. Both types of tax abuse rely on a lack of financial transparency to go undetected. Together, as COVID-19 continues to thrive in each region of the world, they result in the loss of revenues equivalent to the annual salary of a nurse – every second.[1]


From the late 1990s to the mid-2010s, successive UK governments sought to project positive values abroad in the area of financial transparency, accountability and integrity. While that played differently under different governments, there was a common thread – a golden thread, if you will – around the importance of establishing the true ownership of assets and income streams, in order to fight corruption and to protect tax revenues.


For a variety of reasons including the legacy of the British Empire, that was always a complicated agenda. The UK has, in truth, pursued an ambivalent approach. Various policies designed to attract capital – both the shifted profits of multinational companies and the proceeds of outright corruption, have co-existed with efforts to limit at least some aspects of these behaviours. Nonetheless, the approach was largely successful in providing leadership opportunities to the UK and – to a degree – in supporting broader international progress. Events of recent years have complicated the position still further, but there remains a potentially powerful opportunity if the UK can make progress in cleaning out its own house in the coming years.


Specifically, the UK’s chairing of the powerful G7 group of countries in 2021 provides a platform immediately in the wake of Brexit becoming a reality, to re-establish a role at the forefront of efforts to promote financial transparency and integrity.


The problematic context is that the UK, together with its Overseas Territories and Crown Dependencies, is the largest international actor in the provision of both financial secrecy and in profit shifting by multinational companies. The State of Tax Justice 2020 identifies the UK and its network as responsible for $160 billion of tax losses around the world annually, or more than a third of the global revenue losses due to cross-border tax abuse by companies and individual.[2] The opportunity to project positive values will depend on taking genuine, substantive steps to curb these abuses – and working internationally to propagate the advances.


The ABC of transparency, and UK leadership

The Tax Justice Network’s ABC of transparency is a central element of the policy platform laid out after the organisation’s formal establishment in 2003, and provides a broad structure in which to understand the main areas of policy progress over recent decades. While initially derided as utopian, each element of the platform has subsequently been adopted onto the global policy agenda.


‘A’ stands for the automatic exchange of financial information between countries, ensuring that the tax authorities in one country receive annual information on the foreign financial accounts of their tax residents. This area has arguably seen the greatest progress. The previous standard of information exchange ‘upon request’ has largely been consigned to history. The OECD Common Reporting Standard includes more than 100 signatories, including all significant financial centres except the USA, and provides for multilateral, automatic exchange. This has helped tax authorities around the world identify, and tackle, tax evasion.


The ‘B’ of the ABC relates to beneficial ownership transparency, and specifically the introduction of fully accessible, public registers of the ultimate beneficial owners of companies, trusts and foundations. The emphasis on beneficial owner is to distinguish from the legal owner, which is often simply another legal vehicle. To understand the potential for corruption, tax abuse and other crimes, it is necessary to know the identities of the warm-blooded human beings who stand behind legal entities. 80 countries have so far committed to disclosing beneficial ownership information.[3]


The ‘C’ refers to public, country by country reporting by multinational companies. This measure, based on an original draft accounting standard developed by the Tax Justice Network, effectively creates a transparency level playing field with small and domestic businesses that publish their annual accounts.[4] The measure, adopted into an OECD standard for all large multinationals in 2015, requires data on the economic activity, profits declared and tax paid, in each jurisdiction of operations. Publishing this data would lay bare the patterns of profit shifting, allowing both multinationals and the jurisdictions responsible for profit shifting to be held accountable. The OECD data remains privately provided to tax authorities only and has significant technical weaknesses; but the leading setter of sustainability standards, the Global Reporting Initiative, has now introduced a fully robust standard for voluntary public reporting which is seeing enthusiastic adoption from leading companies including Vodafone, Philips and Shell.


The UK’s role in progress in each area has been valued. In broad strokes, the Labour government of Tony Blair elected in 1997 had taken the important step of recognising the threat posed to international development by the financial secrecy offered by ‘tax havens’. The 2000 White Paper on Globalisation put down an important marker in this area, and coupled with the Oxfam report of the same year on the revenue losses imposed by havens, played a catalytic role in energising what became the international movement for tax justice.[5] The Blair government also initiated the Extractive Industries Transparency Initiative (EITI), which played a role in the gradual development of higher standards of disclosure of multinational companies’ payments to governments.


In terms of the ABC, the contributions are more specific and more recent. First, on automatic information exchange, the UK and its extended network of Overseas Territories and Crown Dependencies are among the signatories of the OECD Common Reporting Standard. In addition, the UK repeatedly pushed under David Cameron to ensure the full inclusion of lower-income countries, so that the benefits of the new transparency being created for OECD members would not be denied to others.


The UK has shown perhaps the greatest leadership on beneficial ownership, with David Cameron making the creation of the UK register for companies a central component of his ‘golden thread’ approach that underpinned both the G8 summit and his subsequent international statesmanship, including a 2016 anti-corruption summit where a number of additional countries committed to introduce company registers. The EU also acted on this agenda, committing to public registers not only for companies but also for trusts and foundations, while the UK government has been much more reluctant to take action on trusts. A backbench amendment in the UK parliament also led to a (pending) requirement for public registers for companies in the Overseas Territories.[6]


Lastly, the UK’s involvement in the rise of greater corporate transparency at country level dates back to the EITI but goes further. In 2016, an amendment to the Finance Bill made the UK government the first to legislate to make OECD country by country reporting data public. As yet, however, the Treasury has refused to make use of the powers granted, and it appears increasingly likely that the EU will move first.



A Global Asset Registry: Recommendations from the UK pilot

Critical to both international anti-corruption efforts and the prospects for effectiveness of wealth taxes, the proposal for a global asset registry relates to the creation of a searchable register, containing both public information and information accessible only to relevant tax and legal authorities, showing the beneficial ownership of all significant asset classes.[7] This would be achieved by enabling connectivity between existing registers, and creating additional data sources where necessary; and with the potential to extend within countries and across borders.


In 2019, the Independent Commission for the Reform of International Corporate Taxation (ICRICT) undertook a scoping study of asset ownership information available in the UK (with a final report due out in December 2020).[8] The UK was in part chosen because of its relatively advanced position in some areas, and the report found that most assets that could be subject to a national asset registry are already required to register some ownership information with a government authority (e.g. land, cars, yachts, jets and stock of non-listed companies) or at least their ownership information is centralised by one or few private players, such as the central securities depository (for some listed stock and other financial assets) or the seven custodians offering vaulting services for gold and other precious metals. However, the report identified shortcomings, including the fact that government registries are not always centralised, or they may have incomplete information (e.g. no price or value information), or they may contain no public access to ownership information. In addition, there is no registry at all (either by the government or a private actor) for art objects, antiques, jewellery, cash and crypto-assets such as bitcoins.


The study makes a series of recommendations to address the gaps in UK asset transparency. In addition to the creation or expansion of registers, and the inclusion of price and value data, the study highlights the need for information to be published online for free, in open data format; and, importantly, for the publication of more comprehensive statistics, for example by income level, and type of asset for those assets that are considered confidential, such as bank accounts. A complementary measure would be to require self-reporting of wealth information on worldwide assets, potentially based on a threshold. This would be easy to implement because the UK already requires most of this information under inheritance tax. It would also allow the estimation of wealth, both to measure inequality and in case there is a future decision to levy a wealth tax.


Regardless of the approach to be implemented, the scoping study considered that the UK is well positioned to establish a national asset register containing ownership information at the beneficial ownership level, for a number of reasons. First, there is political commitment towards becoming a champion in transparency and open data, as shown by the UK’s leadership in publishing companies’ beneficial owners in online public registries where information is available for free and in open data format. Second, the UK already has experience and interest in analysing and measuring wealth, as shown by the Office of National Statistics (ONS) publications based on the Wealth and Assets Survey and wealth statistics published by the UK tax authorities (HMRC) based on inheritance tax returns. Third, the UK has the technology and capabilities to process and apply advance analytics to millions of data from different sources, as exemplified by HMRC’s “Connect” software used to detect tax misreporting. Finally, the report notes that the UK’s recent experience with Unexplained Wealth Orders demonstrates the intention to take action, in response to the information it collects, by freezing and confiscating assets whenever the owner cannot explain how they were acquired.



Opportunities at the G7 and beyond

Post-Brexit, the UK faces major challenges in many areas, including in establishing a new regime for its international trade. With the decision to end the independence of the Department for International Development and to set aside the aid commitment of 0.7 per cent of national income, the prospects for influence and international policy leadership appear limited. But the history of the UK’s positioning on critical issues of financial transparency points to a potential opportunity.


Eight years on the UK’s chairing of the G8 group of countries in 2013, the 2021 meeting of the G7 provides a global moment to re-establish the country’s role in promoting financial transparency. Bold steps on transparency at home would be needed to set the basis; but the possibilities are clear and feasible. All major UK political parties are committed in principle to tackling tax avoidance and tax evasion, and polling for Tax Justice UK shows that 84 per cent of people want politicians to close loopholes to stop big companies and wealthy people avoiding paying tax, rising to 91 per cent for Conservative voters.[9]


In respect of the automatic exchange of financial information, the UK can set a standard for the publication of aggregate data on the financial account holdings of UK tax residents in each other jurisdiction, alongside the values reported to HMRC – providing an immediate accountability check on the extent of undeclared assets and related income streams, as well as identifying the most high-risk jurisdictions for non-declaration. The Australian and German governments have taken some steps in this area; the UK could create the standard. Adding in aggregate data on the holdings in UK financial institutions of tax residents of other countries would be world-leading, and a valuable service especially to those lower-income countries still excluded from the OECD exchange of data.


In terms of beneficial ownership, the UK should implement without further delay its stalled commitment to create a public register of the beneficial owners of foreign companies owning UK property, and could then build on its existing lead and announce steps towards joining up and addressing the gaps in the various ownership registers, setting a course for the broader asset transparency envisaged in the proposals for a global asset register to fight corruption and tax abuse.[10] And on country by country reporting, the UK could simply make use of the existing legislation and require multinationals to publish their OECD standard data – with effectively zero additional compliance costs, and the potential to bring in significant revenues.[11]


Finally, continuing to assist the Crown Dependencies and Overseas Territories to achieve the same standards would be valuable – while also indicating the need for financial support for these jurisdictions to pursue alternative development paths. This should be the bare minimum to reflect the UK’s historic and continuing responsibility for encouraging so many of these jurisdictions to pursue offshore financial services. That policy stance, based on reducing UK aid spending and bolstering the City of London’s pre-eminence by encouraging illicit inflows, reflected the scant regard of policymakers at the time for the economic distortions and needless inequalities that resulted, as part of the broader damage of the ‘finance curse’.[12]


Taking the opportunity to promote positive values of financial transparency, with the platform of the G7 chair in 2021, will not be easy – but could fundamentally reposition the UK, support its dependent territories to find new economic futures, and make a major contribution to global financial transparency and to curbing the scale of international corruption and tax abuse.



  • The UK should leverage its chairing of the 2021 G7 and its preeminent position in international finance by taking leadership on financial transparency, with commitments to:
    • publish aggregate data on the automatic exchange of financial information to curb further the threat of bank secrecy;
    • extend, improve and connect public registers of beneficial ownership to eliminate anonymous ownership of assets; and
    • put into practice the existing legislation to require public country by country reporting from multinational companies, to curtail profit shifting.
  • The UK should ensure the rollout of all these measures across its network, by working with the Overseas Territories and Crown Dependencies – including through substantial financial support to repair the damage of the UK’s having promoted their offshore financial secrecy role over decades, and to assist the transition to alternative economic development paths.


Alex Cobham is chief executive of the Tax Justice Network, and a commissioner for the Scottish Government’s Poverty and Inequality Commission. Recent publications include The Uncounted (Polity Press, 2019); and Estimating Illicit Financial Flows (OUP, 2020, with Petr Janský).

Andres Knobel is a senior researcher at the Tax Justice Network. He has also worked as a consultant on financial secrecy for the Inter-American Development Bank, ICRICT and the UN High-Level FACTI Panel.

Robert Palmer is the Executive Director of Tax Justice UK, which works to ensure the UK’s tax system is fair and effective. Previously he helped establish the Open Data Charter secretariat. While at Global Witness, Robert led a global campaign to tackle the laundering of the proceeds of corruption, including by championing beneficial ownership transparency.


Image by Diliff under (CC).


[1] Tax Justice Network, Global Alliance for Tax Justice and Public Services International, State of Tax Justice 2020, Tax Justice Network, 2020,

[2] Tax Justice Network, Global Alliance for Tax Justice and Public Services International, State of Tax Justice 2020, Tax Justice Network, 2020,

[3] Open Ownership:

[4] Richard Murphy, A Proposed International Accounting Standard: Reporting Turnover and Tax by Location, Association for Accountancy and Business Affairs, 2003,; Alex Cobham, Petr Janský and Markus Meinzer, A half-century of resistance to corporate disclosure, Transnational Corporations 25(3), 1-26, 2018,

[5] HMG, Eliminating World Poverty: Making Globalisation Work for the Poor, White Paper on International Development, HMSO, 2000, Ruth Mayne and Jenny Kimmis, Tax Havens: Releasing the hidden billions for poverty eradication, Oxford, 2000,

[6] BBC, Ministers back down on tax haven company registers, May 2018,

[7] See e.g. the work of the UK Wealth Tax Commission at, including its forthcoming report; and the recent Treasury Select Committee evidence session dedicated to the potential:

[8] Andres Knobel, Pilot study for a UK Asset Registry–Phase 1: An assessment of available asset ownership information, ICRICT, December 2019,

[9] Tax Justice UK, Talking Tax: How to win support for taxing wealth, Tax Justice UK,

[10] Department for Business, Energy & Industrial Strategy, Draft Registration of Overseas Entities Bill,, July 2018,

[11] Tax Justice UK, Simple tax avoidance measure could raise £2.5 billion, Tax Justice UK, 2018,

[12] On the UK government decisions and on the damage of an excessively dominant financial sector, including for the UK itself, see Nick Shaxson: 2011, Treasure Islands: Tax Havens and the Men who Stole the World, London: Palgrave Macmillan on the development of the UK’s network; and 2018, The Finance Curse: How Global Finance is Making Us All Poorer, London: Bodley Head.

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