A balance must be struck between transparency and an individual’s right to privacy, writes Anna Gaston
It is interesting that this increased privacy drive should come at a time when governmental and public expectations of transparency are so high.
Over the last few years the UK government has introduced a number of transparency initiatives seeking to shine a light on who owns what in the UK – and in some cases overseas.
Most people will be familiar with the Common Reporting Standard (CRS), which provides for the disclosure of information between HMRC and relevant overseas authorities. In addition The People with Significant Control register (PSC) and the Beneficial Ownership of Land register (which will become operational in 2021) provide that the true owners of a UK company or UK land should be published for all to see, alongside the value of the property (already publicly available from the Land Registry).
The ostensible – and entirely laudable – intention behind this transparency drive is to reduce opportunity for individuals to hide assets from tax authorities. However, many question where the line should be drawn and argue that the quest for complete transparency is nothing more than a licence for nosiness. There are many proper reasons why tax paying and law abiding citizens might wish to keep their affairs private – particularly their home addresses.
It may help to look at Norway: in October of every year, the tax returns of all Norwegian citizens are posted online for all to view. This may seem like a nightmare to many – that not only the tax authorities, but any curious neighbour, journalist, stranger or criminal can find out exactly how much you earn. The benefits of honesty aside, one might wonder why it is necessary for the general public to have access to such information. Surely it is the tax authorities alone who require transparency, and universal access contributes no further to the prevention of tax evasion?
Recently, the law firm Mishcon de Reya confirmed that it has filed a formal complaint with the UK’s Information Commissioner. They argue that the CRS and the beneficial ownership registers infringe data protection rules.
Clearly a balance must be struck between transparency and an individual’s right to privacy. It is up to UK legislation to achieve the balance between honouring privacy and gathering tax and – while it is unclear as to where that balance lies – I wish Mishcon de Reya the best of luck!
Anna Gaston is a senior associate at Maurice Turnor Gardner