The law we need to really regulate companies and trusts

Tax Research UK:

John McDonnell appropriately called for proper registers of beneficial ownership for companies and trusts in the Uk and its Crown Dependencies and Overseas Territories today. And I support the call.

But the call is not enough. That’s because right now the UK supposedly has a register of beneficial ownership of companies and the result is an absolute farce. Recent evidence reported in Scotland was that there are just four people at Companies House in Cardiff who check the near four million annual declarations submitted by UK companies each year. This, of course, means it is impossible for them to undertake any proper checks at all on these returns. The consequence is obvious: there is in effect no checking at all on the returns made by UK companies, which can be nonsense as a result.

And that means we do not have a Register of Beneficial ownership in the UK; we have a sham that masquerades  as such a thing instead. And that is no use to anyone but a government that wants to claim it is doing something about abuse when it is actually doing nothing of the sort. In that case this is not a model to copy.

So, what can be done about this? Two things, I suggest. One is to employ a lot more people to properly regulate companies, both at Companies House and at HMRC. And this need cost the taxpayer nothing: make those using companies pay for the costs of properly regulating them is the way to avoid that. It’s really not hard to put up Companies House fees tenfold (to £130 a year) to deliver a vastly more effective service at no cost to the taxpayer at all.

Second, law that I wrote in 2013 needs to be passed. That law is here. Only clause 4 onwards matters. I also reproduce the relevant bits below because I did not write that law for the late Michael Meacher MP for fun: I wrote it because it needed to be law and as I recall it Jacob Rees Mogg talked it out in the Commons.

I’m sure Rees Mogg had the best of intentions.

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