Use of tax havens by British companies is revealed

A total of 98 of the FTSE 100 companies use tax havens, including the state-backed Royal Bank of Scotland and Lloyds Banking Group, according to a report published today.

ActionAid, the international development charity, said the use of offshore companies had reached "epidemic levels" and demanded urgent action by politicians to live up to their rhetoric about closing tax loopholes. They said tax dodging by multinational companies in the world's poorest countries kept them dependent on aid from countries such as Britain.

The charity, which has analysed new information requested by Companies House, found that the 100 largest groups registered on the London Stock Exchange have 34,216 subsidiaries, joint ventures and associates – a quarter of which are located in tax havens.

Of the FTSE 100, only Fresnillo and Hargreaves Lansdowne do not declare any tax-haven companies. The advertising group WPP has the most with 611, but the banking sector makes the heaviest use of these firms. The big four high street banks have 1,649 between them, including the partly state-owned banks RBS, with 400, and Lloyds, with almost 300.

Chris Jordan, a tax justice expert at ActionAid, said the research also showed the need for more coherence in the Government's policy. "Helping companies to avoid tax payments to the same governments that we are supporting through overseas aid is a false economy for British taxpayers."

ActionAid also criticised the Government for considering reforms to controlled foreign companies it said would give an £840m UK tax break to firms using tax havens, and make it easier for them to dodge taxes in developing countries. But last night the Treasury challenged that interpretation of its proposals.

The charity admitted that its report, "Addicted To Tax Havens: The Secret Life Of The FTSE 100", does not in itself prove tax avoidance. But it argued that the scale of multinational groups' operations in such countries showed the need for greater transparency.

The banks are the biggest users of the Cayman Islands, where Barclays alone has 174 companies. Meanwhile, there are more than 600 FTSE 100-owned companies in Jersey, more than in the whole of China;