‘Shell’ companies’ secret owners to be made public

The Prime Minister announced that a UK register of the beneficial ownership of companies would be made public, shining a spotlight on international cash flows.

Mr Cameron, who made tax transparency a key theme of the G8 summit in Northern Ireland, urged other world leaders to build on the commitments made at Lough Erne.

He promised a “relentless” pursuit of businesses that break the rules and said that by making the register public it will be easier for firms and developing countries to see who they are really dealing with.

Speaking at the Open Government Partnership summit in London, he said: “For too long a small minority have hidden their business dealings behind a complicated web of shell companies – and this cloak of secrecy has fuelled all manner of questionable practices and downright illegality.

“Illegality that is bad for the developing world – as corrupt regimes stash their money abroad under different identities. And illegality that is bad for Britain’s economy too – as people evade their taxes through untraceable trails of paperwork.

“Not only is this hugely unfair to the millions of hard-working people in Britain who pay their tax, but it’s also bad for business. To keep corporate taxes low, you’ve got to keep corporate taxes coming in. As I’ve put it, no tax base – no low tax case.

“So that’s why we need to shine a spotlight on who owns what and where money is really flowing.

“This summer at the G8 we committed to do just that – to establish a central register of company beneficial ownership. And today I’m delighted to announce that not only is that register going to go ahead, but that it’s also going to be open to the public.”

The decision to make the UK register publicly accessible has been welcomed by campaigners and business leaders.

Poverty campaign group One said it was a “really important moment in the fight against corruption”.

One’s Europe executive director Adrian Lovett said: “Making information about who owns and controls companies publicly available will give citizens and journalists in developing countries access to the data they need to follow the money and root out corruption.”

Chris Bain, director of aid charity Cafod, said: “It is both the right thing to do as it will support the global fight against money laundering and tax evasion, and also shows that the Government has listened to public opinion.”

Roger Barker, director of corporate governance and professional standards at the Institute of Directors, said: “From a governance perspective, it is right that the true owners of companies should be transparent both to the company itself and the wider business community.

“Using the corporate veil to obscure underlying ownership brings the corporate sector into disrepute and creates significant opportunities for wrongdoing or criminal activity.”