Richard Burgon MP, Labour’s Shadow City Minister speaking on Labour’s amendment to the Bank of England and Financial Services Bill ‘Combating abusive tax avoidance’, said:
“The leak of the Panama Papers over the past fortnight has reawakened public concern with our financial system. That is why Labour has tabled New Clause 14 ‘Combating abusive tax avoidance’ to the Bank of England and Financial Services Bill.
“It will set out that ‘combating abusive tax avoidance’ should be established as a new regulatory principle for the Financial Conduct Authority and requires that they ‘undertake, in consultation with the Treasury, an annual review for presentation to the Treasury into abusive tax avoidance’.
“And it will make clear that part of this new principle should be ‘measures to ascertain and record beneficial ownership of trusts using facilities provided by banks with UK holding companies or entities regulated by the Bank of England or the FCA, control of shareholders and ownership of shares, and investment arrangements in an overseas territory outside the UK involving UK financial institutions.’
“This amendment from Labour’s Tax Transparency Enforcement Programme seeks to respond to public concerns and bring about measures to deliver the necessary transparency needed. If George Osborne opposes this it will say all you need to know about his real desire to clamp down on tax avoidance.”
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Labour has produced a Tax Transparency Enforcement Programme following the Panama Papers leak and it being revealed that thousands of companies listed in the Mossack Fonseca papers have financial services provided by UK banks.
Point 8 on our Tax Transparency Enforcement Programme makes clear Labour will ‘Work with banks to provide further information over beneficial ownership for all companies and ‘trusts that they work for’. This amendment seeks to establish a procedure to enact that.
Labour’s New Clause 14 can be read here: html and PDF. The New Clause sets out combating abusive tax avoidance as a new regulatory principle for the Financial Conduct Authority.
The Financial Conduct Authority wrote to banks urging them to declare their links to Mossack Fonseca by 15th April. The Government also announced a deal on the global exchange of beneficial ownership information on 15th April.