55% of FTSE100 currently fail to publicly mention tax evasion – lack of clear policy could concern stakeholders

01 Oct 2018 | 09:00 am | 2 min. read

A third of financial services firms in the FTSE100 have no mention of tax evasion in their published documentation

55% of FTSE100 companies do not mention how they are managing the risks of tax evasion in their published documents, shows research by Pinsent Masons, the international law firm.

The research is based on an analysis of tax strategy documents, annual reports, Environment Social and Governance (ESG) policies and other related documents. From 2016, it has been compulsory for large UK companies* to publish a tax strategy which must contain extensive details of the company’s tax planning arrangements and attitude towards HMRC.

Pinsent Masons says new legislation means the FTSE100 and other businesses are now at risk of criminal sanctions if they fail to prevent the facilitation of tax evasion.

Under the Criminal Finances Act (CFA) 2017, which came into force one year ago on 30th September 2017, businesses are now criminally liable if any of their employees, agents or others third parties facilitate tax evasion whilst providing services on their behalf.

The lack of communication by the FTSE100 of how they are managing the risks relating to tax evasion could cause concern for shareholders and other stakeholders, as this is an area of increasing reputational and financial risk.

Pinsent Masons says the lack of communication could also make it harder for companies to demonstrate that they have taken ‘reasonable prevention procedures’, which is a key defence for a company found liable under the new laws. This may also be troubling for shareholders.

Failure to comply with the new law could result in unlimited financial penalties, ancillary orders such as confiscation orders or serious crime prevention orders, and serious reputational damage. A successful criminal prosecution may also prevent a company from bidding from public sector contracts. A company does not have to be directly involved in the tax evasion or even be aware of it to be prosecuted under the new law.

Pinsent Masons’ analysis found that in contrast to tax evasion, just 10% of FTSE100 firms failed to mention how they deal with corruption in their published documents. Companies have been required to set out their approach to corruption since the Bribery Act was introduced in 2010 – the latest requirements for tax evasion mirror these existing ones.

33% of the financial services businesses in the FTSE100 make no mention of tax evasion or how they manage the risk of it. The proportion of financial services firms addressing tax evasion is considerably higher than the FTSE100 average, as it is one of the sectors most at risk of being caught by the tax evasion facilitation offence.

Pinsent Masons adds that the FTSE100 financial services businesses are, by their very nature, going to face the biggest challenges when it comes to preventing the facilitation of tax evasion by employees and others. These firms handle high numbers of financial transactions for High Net Worth individuals and international corporates, who tend to have the most complex tax affairs. Financial services firms also frequently: 

  • Pay large sums to consultants;
  • Engage in largescale cross-border transactions;
  • Rely on contractors;
  • Deal with more than one tax authority

Jason Collins, Partner at Pinsent Masons, says: “FTSE100 firms failing to publicly address tax evasion could raise questions for stakeholders over their management of reputational and financial risks.”

“Compliance practices at FTSE100 firms are increasingly under scrutiny now that they are liable for tax evasion at any level. Financial services firms in particular will be under the spotlight – it comes with the territory.”

“Companies can now effectively become criminally liable for third party tax evasion. It will no longer be a reasonable excuse to say that management was totally unaware of any tax evasion that took place and would never allow it had they been.”

“With the potential for unlimited fines its not surprising that shareholders and other stakeholders will want reassurance that big businesses have got the risks of tax evasion under control.”

*With an annual turnover of £200 million or more

Key Contacts

Jason Collins

Jason Collins

Partner, Head of Litigation, Regulatory & Tax

View Profile

Latest press releases

Show me all press releases

Pinsent Masons advises Primary Capital Partners on management buy out

International law firm, Pinsent Masons, has advised Primary Capital Partners on its management buy-out of British engineering company Foster & Freeman.

Pinsent Masons hires two partners in Australia to boost its Finance and Projects team

International law firm Pinsent Masons has appointed partners Mark Waddell and James Morgan-Payler to further enhance the firm's infrastructure and energy practice in Australia and across Asia Pacific.

Pinsent Masons advises on Zagreb Airport refinancing close

International law firm Pinsent Masons has advised Međunarodna Zračna Luka Zagreb (MZLZ) on the c.€200 million refinance of Croatia's Zagreb Airport.

People who viewed this press release also viewed

Show me all press releases

Pinsent Masons announces AI pilot to provide novel insights to clients using machine learning

International law firm Pinsent Masons is currently running a pilot programme with machine learning company Genie AI as it marks its next step in using AI tools for contract analysis.

Pinsent Masons appoints TMT specialist in Düsseldorf

International law firm Pinsent Masons has appointed Dr Marc Salevic in Düsseldorf to strengthen its Technology, Media and Telecommunications (TMT) team across Germany.

Pinsent Masons represents legal sector at GREAT Festival of Innovation, Hong Kong

International law firm Pinsent Masons will be showcasing its approach to innovation in legal services at the GREAT Festival of Innovation in Hong Kong.

For all media enquiries, including arranging an interview with one of our spokespeople, please contact the press office on

+44 (0)20 7418 8199 or 

Location contacts