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FTSE giants face tough questions on tax and financial secrecy at AGMs this year

May 22 2012 - Tax is joining high pay as an issue at FTSE100 companies’ AGMs this year, with Boards facing tough questions about their use of tax havens, financial secrecy and whether – with complex chains of subsidiaries stretching across the globe - they know what is really going on.

Shell and HSBC will both face tax questions at their shareholder meetings this week, as part of a drive by Christian Aid and responsible investment campaign FairPensions to get companies to treat their tax practices as part of their wider responsibility to the societies in which they operate.

Glencore, Rio Tinto, Barclays, Schroders and BP have already had to answer questions on their tax planning and reporting this AGM season, while Shell, Royal Bank of Scotland, Diageo, Tesco and WPP are likely to come under pressure on tax at their shareholders’ meetings over the coming months.

Katharine Teague, Christian Aid’s Senior Adviser on the Private Sector, will raise tax at this Friday’s HSBC’s AGM. She said: ‘We want to get the FTSE100 thinking far more seriously about how their tax practices could affect their reputations and, ultimately, their bottom lines.

‘It’s no longer acceptable for big companies to avoid tax aggressively, whether in the UK or in developing countries, which we estimate lose some $160 billion a year to tax dodging by multinational companies.’

Louise Rouse, Director of Engagement at responsible investor campaign group FairPensions said: ‘Reviews of the annual reports of FTSE 100 companies’ Annual Reports shows that far too many companies provide far too little information to enable investors assess the risks arising from tax planning.

‘The positive reaction of some companies to AGM requests for greater transparency calls into question the refusals of others to provide more detailed information on revenues earned and taxes paid.’ 

Christian Aid has been campaigning since 2008 on how tax dodging harms people living in poverty in developing countries, by depriving them of the funds they need to run vital public services such as schools and hospitals.

The development agency wants multinational companies to reveal much more information about their financial affairs, to help tax authorities, the media and civil society to tell whether they are paying the right amount of tax.

‘Companies which are paying the taxes they owe should be willing to reveal more about their finances,’ added Ms Teague.

‘Specifically, we want to see companies reporting data such as the profits they make and the taxes they pay separately for each country in which they operate. This – country-by-country reporting – would make it easier to identify companies which are artificially shifting profits out of the countries where they’re made and into tax havens.’

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For more information from Christian Aid, please contact Rachel Baird on 0207 523 2446 or rbaird@christian-aid.org

For more information from FairPensions, please contact Matthew Butcher on 0207 403 7806 or matthew.butcher@fairpensions.org.uk

Notes to Editors:

1. Christian Aid works in some of the world's poorest communities in nearly 50 countries. We act where the need is greatest, regardless of religion, helping people build the lives they deserve.

2. Christian Aid has a vision, an end to global poverty, and we believe that vision can become a reality. Our report, Poverty Over, explains what we believe needs to be done – and can be done – to end poverty.  Details at http://www.christianaid.org.uk/Images/poverty-over-report.pdf

3. Christian Aid is a member of the ACT Alliance, a global coalition of 100 churches and church-related organisations that work together inhumanitarian assistance and development.  Further details at http://www.actalliance.org

4. Follow Christian Aid's newswire on Twitter: http://twitter.com/caid_newswire

5. For more information about the work of Christian Aid visit www.christianaid.org.uk