According to research by Thomson Reuters, companies in the FTSE 100 have set aside £1.66bn to cover the cost of tax litigation – a fall of 31% from the £2.39bn set aside for tax litigation purposes by FTSE 100 companies in 2014 – with one company’s tax litigation provisions making up the bulk of this figure, meaning the remaining FTSE 100 companies have collectively set aside approximately £0.22bn each.
Pharmaceutical companies made the biggest provisions for tax disputes and litigation in 2015, setting aside £1.46bn, which accounted for 88% of the total amount of provisions set aside by FTSE 100 companies – an increase from 79% in 2014. However, one company was responsible for almost all of these provisions, with £1.44bn set aside – the largest amount of provisions from all FTSE 100 companies, and roughly 87% of the total provisions from FTSE 100 companies.
Thomson Reuters also reported that more businesses are providing further detail and information about their tax strategies and general approach to taxation to the public, and that as of May 2015, 56 FTSE 100 companies had provided such information – up from 32 in 2012 – including matters regarding their relationships with national tax authorities and their attitude towards tax planning.
The company added that pharmaceutical companies are under particularly intense scrutiny by tax authorities because of the allocation of the costs of business across the countries in which they operate, and that its research indicated the reduction in FTSE 100 companies’ provisions for tax disputes ‘suggests that tax authorities’ pursuit of corporate tax evasion and avoidance in recent years may now be paying off, with businesses wanting to avoid reputational damage from disputes over the amount of tax they pay’.
According to research by Thomson Reuters, companies in the FTSE 100 have set aside £1.66bn to cover the cost of tax litigation – a fall of 31% from the £2.39bn set aside for tax litigation purposes by FTSE 100 companies in 2014 – with one company’s tax litigation provisions making up the bulk of this figure, meaning the remaining FTSE 100 companies have collectively set aside approximately £0.22bn each.
Pharmaceutical companies made the biggest provisions for tax disputes and litigation in 2015, setting aside £1.46bn, which accounted for 88% of the total amount of provisions set aside by FTSE 100 companies – an increase from 79% in 2014. However, one company was responsible for almost all of these provisions, with £1.44bn set aside – the largest amount of provisions from all FTSE 100 companies, and roughly 87% of the total provisions from FTSE 100 companies.
Thomson Reuters also reported that more businesses are providing further detail and information about their tax strategies and general approach to taxation to the public, and that as of May 2015, 56 FTSE 100 companies had provided such information – up from 32 in 2012 – including matters regarding their relationships with national tax authorities and their attitude towards tax planning.
The company added that pharmaceutical companies are under particularly intense scrutiny by tax authorities because of the allocation of the costs of business across the countries in which they operate, and that its research indicated the reduction in FTSE 100 companies’ provisions for tax disputes ‘suggests that tax authorities’ pursuit of corporate tax evasion and avoidance in recent years may now be paying off, with businesses wanting to avoid reputational damage from disputes over the amount of tax they pay’.
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