Plans to lift 'cloak of secrecy' off 'shell company' owners

Prime Minister announces move to create central register for all British firms to combat criminals and corruption

All British-registered firms will soon have to reveal their true ownership to prevent criminals from using shadowy “shell companies” as a front for terrorist funding, money-laundering or tax evasion, David Cameron will announce today.

Such firms, which exist only on paper, are legally entitled to keep the identities of their key figures, hidden, making them ideal for hiding cash from the authorities. The Prime Minister will set out plans which are designed to lift this “cloak of secrecy” by creating a central register of the ultimate ownership of UK companies.

He will argue that the initiative will benefit domestic taxpayers and stop corrupt foreign regimes from hiding their riches in “shell companies”.

The moves were initially signalled at this summer’s G8 summit in Northern Ireland, but the Government had only been expected to make the register available to the Inland Revenue.

However, to the delight of campaigners, it has gone further than anticipated and decided to open the register to public scrutiny.

The scheme, which has been championed by the Business Secretary, Vince Cable, is likely to be included in the Coalition’s next legislative programme, with a view to establishing the register by 2015.

Mr Cameron will say: “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 practice and downright illegality.”

He will say the illegality is “bad for the developing world as corrupt regimes stash their money abroad under different identities” and “bad for Britain’s economy too as people evade their taxes through untraceable trails of paperwork”.

He will tell a conference in London: “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.”

The Prime Minister will call on other countries to back Britain’s approach.

One source said last night: “We are one of the first countries to say ‘we are doing this’ and we want others  to follow.”

Gavin Hayman, the director of the campaign group Global Witness, said: “Anonymous shell companies are the global getaway cars for crime, corruption and tax evasion. Full credit should go to the Prime Minister and the Business Secretary for acting to take away the keys.”

Roger Barker, the director of corporate governance and professional standards at the Institute of Directors, said: “It is right 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.”

The anti-poverty campaign group One hailed the move as a “really important moment in the fight  against corruption”. Adrian Lovett, its Europe executive director, said: “David Cameron has made life much more difficult for the criminal and corrupt who exploit secrecy around company ownership. 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.”

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Customer Account Manager

£27000 - £33000 per annum: Recruitment Genius: This fast growing cloud based I...

Ashdown Group: Product Marketing Manager - Software & Services

£35000 - £45000 per annum + Benefits: Ashdown Group: Product Marketing Manager...

Recruitment Genius: Exhibition Sales Executive - OTE £35,000

£16000 - £35000 per annum: Recruitment Genius: An expanding B2B exhibition and...

Recruitment Genius: QA Technician

£16000 - £18000 per annum: Recruitment Genius: This leading manufacturer of re...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat