United Kingdom Corporate and Individual Tax and Financial Transparency Bill (HC Bill 29)

1 Disclosure of financial information by large companies

After section 409 of the Companies Act 2006, add—

“409A Disclosure of financial information by large companies

(1) Section 409(3) shall not apply to a large company.

(2) 5A large company shall in addition to the information required by
section 409 provide the following additional information with regard to
each of its related undertakings—

(a) the registered name;

(b) jurisdiction of incorporation;

(c) 10company number;

(d) jurisdictions in which it trades;

(e) the trading name it uses in each jurisdiction if different from its
registered name;

(f) the precise nature of its trade, sufficiently described to ensure
15its activities can be accurately identified;

(g) the percentage of the related undertaking controlled by the
company

(h) a statement of the turnover, net profit before tax, current
taxation liability owing, number of employees and their total
20employment cost and the net assets of the related entity for the

period for which the company is reporting whether such data
be audited or otherwise; and

(i) the web address where the most recent financial statements of
the related undertaking prepared in accordance with
5accounting principles consistent with those used by the
company are available for public inspection without charge in a
readily accessible format.

(3) If the information required by subsection (2)(i) is not available for any
related undertaking then the large company shall publish the relevant
10financial statements for all its related undertakings on its own web site
and make that information available to any person seeking it without
charge in a readily accessible format.

(4) In this section, “large company” means a company that is neither a
medium sized company as defined by section 465 of the Companies Act
152006 or a small company as defined by section 381 of the Companies
Act 2006.”

2 Disclosure of taxation information by selected large companies

(1) This section shall apply to the following companies which shall be referred to
as disclosable companies—

(a) 20all constituent members of the FTSE 100 within any year ending 31
March and those UK tax resident companies that are their related
undertakings;

(b) those 50 large companies, not being members of the FTSE 100, that
have, when arithmetically combined with their UK resident related
25undertakings, the largest by value UK taxable profits before the offset
of all tax allowances and reliefs of any sort whatsoever in a year ended
31 March;

(c) those 50 large companies, not being members of the FTSE 100 or having
been included in the category defined by paragraph (b) above, that
30have when arithmetically combined with their related undertakings,
whether UK resident or not, the largest value of supplies in the United
Kingdom, whether chargeable or exempt, for the purposes of value
added tax in a year ended 31 March;

(d) those 50 large companies, not being members of the FTSE 100 or having
35been included in the categories defined by paragraphs (b) and (c) above
that have, when arithmetically combined with their UK resident related
undertakings, the largest liability to make payment of income tax and
national insurance contributions in respect of deductions made from
employee income under Pay As You Earn regulations in a year ended
4031 March.

(2)
HM Revenue & Customs shall publish on its web site in XBRL format on 31
December each year the corporation tax return of any disclosable company
received in the twelve month period to 31 March ending in that same calendar
year or shall state that no such return has been received and what action is
45being taken to remedy that defect.

(3) The Secretary of State must lay regulations to give effect to these requirements
within 6 months of the passing of this Act, including those penalties that shall
apply for failure to notify. The regulations must be in the form of a statutory

instrument and may not be made unless a draft of the statutory instrument has
been laid before, and approved by a resolution of, each House of Parliament.

3 Disclosure of tax returns of selected individuals

(1) HM Revenue & Customs shall, no later than 1 March each year arithmetically
5combine for each tax payer who has submitted a tax return by 31 January in
that year in respect of the tax year to the previous 5 April the taxable income of
all sorts after the offset of any trading expenses if appropriate and the capital
gains after the offset of the cost of acquisition of assets disposed but in each
case before the offset of any further allowances and reliefs and then rank the
10resulting total figure for income and gains shown on those tax returns in
descending order of magnitude.

(2) HM Revenue & Customs shall publish no later than 15 March in each year the
250 tax returns for the previous tax year ended 5 April that ranked highest on
the listing produced in accordance with the provisions of subsection (1).

(3) 15The tax returns to be published in accordance with the provisions of subsection
(2) shall not be anonymised.

(4) If a person submits a tax return after 31 January in a year that relates to the tax
year to the previous 5 April and that tax return would have been included in
the ranking referred to in subsection (1) then HM Revenue & Customs will
20publish that tax return in accordance with the provisions of this Act not later
than 4 weeks after its date of receipt but shall not withdraw from publication
any tax return already published as a result.

(5) The Secretary of State must lay regulations to give effect to these requirements
within 6 months of the passing of this Act, including those penalties that shall
25apply for failure to notify. The regulations must be in the form of a statutory
instrument and may not be made unless a draft of the statutory instrument has
been laid before, and approved by a resolution of, each House of Parliament.

4 Disclosure of beneficial ownership of companies

(1) In section 113 of the Companies Act 2006, after subsection (2) insert—

“(2A) 30The company shall undertake those actions required by Regulation 5 of
the Money Laundering Regulations 2007 (S.I. 2007, No. 2157) to
positively identify those persons who are beneficial owners of the
shares that it issues and if it does become aware as a result that the
person who is recorded as the owner of a share is not the same as the
35person who has beneficial ownership of that share as defined by those
Regulations then it shall in addition to recording the name of the
recorded owner of the share also record the name, date of birth and
nationality of the beneficial owner that it has identified and the means
by which that beneficial owner exercises their control of the share
40including the identity of any intermediate companies, trusts or other
arrangements that act as agents, nominees or alternates on the
beneficial owners behalf and under their instruction, whether direct or
implicit.”

(2) Regulation 6 of the Money Laundering Regulations 2007 shall be amended so
45that on each occasion when 25% is referred to 10% shall be substituted in its
place.

(3) In section 856A of the Companies Act 2006—

(a) after subsection (2) insert—

“(2A) The return must state where the person named as the owner of
share recorded in subsection (2) differs from that of the person
5named as the beneficial owner of that share as identified
pursuant to the requirements of section 113(2A) of the
Companies Act 2006 and must where such statement is made
also name that person who is the beneficial owner of the share
in question and state their date of birth and nationality and how
10that beneficial owner exercises their control of the share in
question as recorded by the company pursuant to its obligations
under section 113(2A) of the Companies Act 2006.”

(b) after paragraph (b) of subsection (4) add—

“(c) The information to be supplied under the provisions of
15this section shall be delivered in machine readable
electronic format.”

(4) In section 856B of the Companies Act 2006—

(a) after subsection (3) insert—

“(3A) The return must state where the person named as the owner of
20share recorded in section (3) differs from that of the person
named as the beneficial owner of that share as identified
pursuant to the requirements of section 113(2A) of the
Companies Act 2006 and must where such statement is made
also name that person who is the beneficial owner of the share
25in question and state their date of birth and nationality and how
that beneficial owner exercises their control of the share in
question as recorded by the company pursuant to its obligations
under section 113 (2A) of the Companies Act 2006.”

(b) after paragraph (b) of subsection (4) add—

“(c) 30The information to be supplied under the provisions of
this section shall be delivered in machine readable
electronic format.”

(5) The Secretary of State must lay regulations to give effect to these requirements
within 6 months of the passing of this Act, including those penalties that shall
35apply for failure to notify. The regulations must be in the form of a statutory
instrument and may not be made unless a draft of the statutory instrument has
been laid before, and approved by a resolution of, each House of Parliament.

5 Duty of United Kingdom financial institutions to report

(1) United Kingdom financial institutions must notify Her Majesty’s Revenue and
40Customs and Companies House that they have opened or closed an account in
the United Kingdom for a company within thirty days of that account being
opened or closed stating—

(a) the name and registered number of the company;

(b) the address at which they correspond with that company;

(c) 45the names and full addresses, dates of birth and nationalities of those
persons who they have accepted as having authority to take action with
regard to the account;

(d) the names and addresses, dates of birth and nationalities of those
persons who they have identified as the beneficial owners of the

company in question as required by Regulation 5 of the Money
Laundering Regulations 2007;

(e) the number of the account that they have opened; and

(f) the numbers of any other accounts that they maintain for the company.

(2) 5If a United Kingdom financial institution shall become aware that any of the
matters referred to in subsection (1) shall have changed then they shall notify
HM Revenue & Customs and Companies House within 30 days of their having
become aware of such change.

(3) The Secretary of State must lay regulations to give effect to this requirement
10within 6 months of the passing of this Act, including those penalties that shall
apply for failure to notify. The regulations must be in the form of a statutory
instrument and may not be made unless a draft of the statutory instrument has
been laid before, and approved by a resolution of, each House of Parliament.

6 Duty of Companies House relating to beneficial ownership information

(1) 15Companies House must publish for each company that information required
to be supplied under section 5(1)(a), (b), (c) and (d) of this Act by a United
Kingdom financial institution.

(2) If Companies House cannot secure information that they are entitled to receive
for any reason from any company within ninety days of that information being
20due for submission then they may request the information in question from
any person named under section (5)(1)(c) and (d) of this Act.

(3) If information requested using the provisions of section 6(2) of this Act has not
been supplied to Companies House within 30 days of any request having been
made then Companies House shall advise the directors and beneficial owners
25of the company that they have become personally liable for the debts of the
company until such information is supplied in the form requested and shall
place notice to this effect on public record.

7 Duty of Companies House not to dissolve companies

Companies House must not dissolve any company on the Register of
30Companies under either section 1000 or section 1003 of the Companies Act
2006 if that company has—

(a) an account with a United Kingdom financial institution that the
financial institution in question has not notified has been closed;

(b) closed all its accounts with United Kingdom financial institutions but
35failed to deliver accounts to Companies House covering any period
when such accounts were open;

(c) not supplied information required by Companies House in respect of
which a notice under section 6(2) of this Act has been issued.

8 Duties of HM Revenue & Customs to request tax returns

(1) 40Her Majesty’s Revenue and Customs must issue a request for a tax return to
any company that it has been advised has maintained an account with a United
Kingdom financial institution during the course of any period of account
notified by that company or, in the absence of such notification, for any year
ending on 5 April.

(2) If Her Majesty’s Revenue and Customs cannot secure information that they are
entitled to receive for any reason from any company within ninety days of that
information being due for submission then they may request the information
in question from any person named under section 5(1)(c) and (d) of this Act.

(3) 5If information requested by HM Revenue & Customs under subsection (2) has
not been received within 30 days of any such request having been made then—

(a) HM Revenue & Customs may request copies of the all the banking
records of the company for any periods they consider appropriate from
the United Kingdom financial institution that has advised that it has
10maintained an account on its behalf;

(b) HM Revenue & Customs shall be entitled to use the information
obtained under paragraph (a) to raise such assessments to taxation of
any type they consider might be due with such sums owing being the
joint and several personal liability of the persons identified under
15section 5(1)(c) and (d) of this Act.

(4) The Secretary of State must lay regulations to give effect to this requirement
within 6 months of the passing of this Act, including those penalties that shall
apply for failure to notify. The regulations must be in the form of a statutory
instrument and may not be made unless a draft of the statutory instrument has
20been laid before, and approved by a resolution of, each House of Parliament.

9 Obligations of the Crown Dependencies and British Overseas Territories

(1) The provisions of section 4(1) of this Act shall be extended by way of an Order
In Council to any entity incorporated under statute law in the Crown
Dependencies and British Overseas Territories in such form as shall be
25appropriate for the relevant jurisdiction.

(2) It shall be required by way of an Order in Council that any entity incorporated
under statute law in the Crown Dependencies and British Overseas Territories
that shall identify that it has a beneficial owner resident outside the jurisdiction
where it is incorporated shall advise the money laundering authority in that
30jurisdiction of that fact and shall advise that authority of—

(a) the name and registered number of the entity that is reporting;

(b) the address at which that entity trades;

(c) the names and full addresses, dates of birth and nationalities of those
persons who act as officers of the entity;

(d) 35the names and addresses, dates of birth and nationalities of those
persons who they have identified as the beneficial owners of the entity
in accordance with regulation that matches the requirements of
Regulation 5 of the Money Laundering Regulations 2007;

(e) the name and address of any bank at which the entity maintains an
40account and the account number.

(3) The money laundering authority of the Crown Dependency or British
Overseas Territory to which information has been supplied as a result of the
requirements of subsection (2) of this Act shall be required by way of Order in
Council to—

(a) 45publish the information supplied under subsection (2)(a), (b), (c) and
(d) on a freely accessible web based database for which no charge for
access is made to any person making enquiry;

(b) require that the entity for which information has been published as a
result of the provisions of paragraph (a) publish its annual accounts,

whether audited or unaudited, on the same public accessible database
that is used for the purposes of publishing information under
paragraph (a);

(c) advise HM Revenue & Customs that an entry has been made on the
5database referred to in paragraph (a) if that entry relates to a person
resident in the United Kingdom.

(4) The Secretary of State must lay regulations to give effect to these requirements
within 6 months of the passing of this Act to be enacted in each case by an
Order in Council.

10 10Disclosure of trust information to HM Revenue & Customs

(1) This section applies to any trust that is considered to be resident in the United
Kingdom irrespective of the legal system under which that trust was
established and shall apply irrespective of the law that the trust deed (if any)
states shall apply to the trust.

(2) 15No UK trust shall be considered to have legal effect unless registered with HM
Revenue & Customs in a form that they shall determine requiring, at a
minimum, that the following information with regard to the trust be made
available—

(a) the name of the trust;

(b) 20the date of its settlement;

(c) its trust deed, if any;

(d) any letter of wishes issued to the trustees or other document giving
indication to the trustees as to the manner in which they are to use their
discretion;

(e) 25the names, dates of birth, nationalities and addresses of the settlers
unless such settlement shall have taken place before 1 January 1950;

(f) the names, dates of birth, nationalities and addresses of the trustees;

(g) the names, dates of birth, nationalities and addresses of any identifiable
beneficiaries of the trust in the previous five years;

(h) 30the annual accounts and report of the trust.

(3) The trustees of any UK trust shall be responsible for ensuring that they have
identified the persons whose identity they shall notify pursuant to subsection
(2) above in accordance with the requirements of Regulation 5 of the Money
Laundering Regulations 2007.

(4) 35The property of an unregistered UK trust, which shall be for these purposes a
trust that shall be more than 90 days late in supplying any of the information
due to HM Revenue & Customs pursuant to subsection (2) above shall be
considered to be bona vacantia and all income arising to it shall be the property
of the Crown until such time as registration in the form required by subsection
40(2) is made and any penalty for late registration has been paid.

(5) HM Revenue & Customs shall maintain the information supplied to it in a
register that shall be kept up to date by it at all times.

(6) HM Revenue & Customs shall publish information supplied to it pursuant to
subsection (2) above if that information suggests that the UK trust controls any
45company, in which case the company or companies so controlled shall be
identified, or if—

(a) the total assets of the trust before deducting liabilities exceeded £5
million at any time in the five years previous to publication; or

(b) the income of the trust before the deduction of expenses or
distributions made exceeded £2.5 million in the five years previous to
5publication.

(7) The Secretary of State must lay regulations to give effect to this requirement
within 6 months of the passing of this Act, including those penalties that shall
apply for failure to notify. The regulations must be in the form of a statutory
instrument and may not be made unless a draft of the statutory instrument has
10been laid before, and approved by a resolution of, each House of Parliament.

11 Interpretation

In this Act—

• “British Overseas Territories” means for these purposes Anguilla,
  Bermuda, the British Virgin Islands (BVI), the Cayman Islands,
  15Gibraltar, Montserrat and the Turks and Caicos Islands and not as
  defined by the British Overseas Territories Act 2002;

• “company” is defined as any entity referred to in section 1 of the
  Companies Act 2006 and any entity incorporated under the Limited
  Liability Partnerships Act 2000;

• 20“Companies House” means the Executive Agency of the Department for
  Business, Innovation and Skills managed by the Registrar of
  Companies as defined by section 1060 of the Companies Act 2006;

• “Crown Dependencies” means Guernsey, Jersey and the Isle of Man;

• “financial institution” has the meaning set out in section 182 of the
  25Banking Act 2009;

• “HMRC” means Her Majesty’s Revenue and Customs;

• “related undertaking” is as defined for the purposes of section 409,
  Companies Act 2006;

• “UK trust” means a trust considered to be resident in the United Kingdom
  30irrespective of the legal system under which that trust was established
  and irrespective of the law that the trust deed (if any) states shall apply
  to the trust;

• “XBRL” means eXtensible Business Reporting Language, which is a
  standard to facilitate the creation, distribution and re-use of business
  35reports.

12 Financial provisions

There shall be paid out of money provided by Parliament—

(a) any expenditure incurred under or by virtue of this Act by a Minister of the
Crown or a government department, and

(b) 40any increase attributable to this Act in the sums payable under any other Act
out of money so provided.

13 Short title, commencement and extent

(1) This Act may be cited as the UK Corporate and Individual Financial
Transparency Act 2013.

(2) 45This Act comes into force on the day on which this Act is passed.

(3) This Act extends to England and Wales, Scotland, Northern Ireland, the Crown
Dependencies and British Overseas Territories as defined in this Act.