Development charity, ActionAid, has put together a database of FTSE 100 company subsidiaries that brings to light the use of tax havens in their operations…

The database compiled by ActionAid shows that over 34,000 joint ventures and subsidiaries are operated by the 100 biggest firms registered on the London Stock Exchange.

25% of the subsidiaries listed on the database offer lower tax rates or demand little disclosure to other tax authorities.

By law, UK companies must submit their country of registration along with a list of their subsidiary companies to Companies House; Many FTSE 100 companies have failed to do so.

This has caused an investigation to be initiated by Vince Cable, the business secretary in the coalition cabinet of David Cameron, and the full list of subsidiary companies to be released by Companies House, following a formal complaint by ActionAid.

Vince Cable’s investigation into the use of tax havens by FTSE 100 companies revealed that £18bn in tax is lost in Britain per year from the UK’s richest FTSE companies using overseas tax havens.

This is the first time such a list has been published and many are shocked at how many of the UKs largest listed companies conduct business offshore through tax havens.

Campaigners have responded to the database with an urge to restrict corporate tax avoidanceopportunities.

ActionsAid’s tax justice expert, Chris Jordan, said:

“While multinationals use tax havens to avoid paying their fair share, ordinary people in both rich and poor countries are left to pick up the bill.

“Spending on doctors, nurses and other essential services gets cut for those who need it most.”

ActionAid analysed the published FTSE 100 company list to find that 98 of the FTSE 100 companies listed used overseas tax havens and secrecy jurisdictions.

300 subsidiaries are based in Luxembourg, 400 in the Cayman Islands and 600 in Jersey, where no tax is charged.

Instead of responding to ActionAid’s desire to clamp down on the use of tax havens by FTE 100 companies Chancellor of the Exchequer, George Osborne, has agreed an £840m tax break for those using tax havens.

Kevin Kinsella Jnr, of KinsellaTax, said:

“There is a huge dispute about companies, firms and individuals making use of bona fide schemes set up by professionals to lessen the tax burden.

“Among all this quite unfairly to my mind is the individuals, companies and firms who deliberately defraud HMRC of income tax, corporation tax, value added tax (VAT) and other taxes, who actually need to be taken to account for their misdeeds.

“And then there are the other people, who find for the most part for an honest scheme and are divided as criminals quite unfairly.”

Tax avoidance is a complex issue and should not be ignored. If you have received a tax enquiry for tax avoidance then you need professional advice.

KinsellaTax staff consists of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers, fully experienced inHMRC investigations.

If you are implicated in aTax Avoidance Schemecall us NOW on 0800 471 4546 to speak to one of our dedicated Code of Practice 8tax investigation experts or click here to fill in an online tax enquiry form.

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