G8 vow to tackle tax avoidance

G8 leaders in Fermanagh have signed a Lough Erne Declaration, which seeks to clamp down on tax evasion by companies at a global level.

The co-ordinated action is the first deal of its kind, but it is unclear how effective it will be. Business Editor Laura Kuenssberg reports.

Read: G8's position on tax could prove difficult to deliver

The Trade Union Organisation (TUC) have labelled the Lough Erne tax declaration "so weak it is bordering on irrelevance," and "yet another missed opportunity." Frances O'Grady, general secretary of the TUC said:

Read: Cameron unveils Lough Erne tax deal to tackle evasion

More: G8's position on tax could prove difficult to deliver

Chancellor George Osborne said the G8 summit can be called a success as the government has succeeded in getting leaders to sign up to new rules on international tax.

Read: Cameron unveils Lough Erne tax deal to tackle evasion

Campaigners have welcomed today's Lough Erne Declaration on tax, saying it was "a step in the right direction" but warned there was "major unfinished business" as leaders failed to agree a deal to tackle the chronic hunger afflicting hundreds of millions of people world wide.

Read: Cameron unveils Lough Erne tax deal to tackle evasion

Enough Food For Everyone IF spokesperson Sally Copley said:

"Today’s G8 tax deal is a step in the right direction, but it also leaves major unfinished business.

"Although the G8 has set out the right ambition on information exchange, poor countries battling hunger can’t afford to wait to be included.

"It’s progress that more tax authorities will know who owns phantom firms so they can crackdown on them, but a summit focussed on transparency can’t justify keeping this information secret.

"The public argument for a crackdown on tax dodging has been won, but the political battle remains. Future G8s and G20s must urgently finish the job.”

Prime Minister David Cameron has unveiled the Lough Erne Declaration, signed by the UK, US, Germany, France, Italy, Canada, Japan adn Russia, which vows to "fight the scourge of tax evasion" across borders. The accord pledges to do the following:

• Tackle corruption by requiring extractive industries like mining, oil and gas to report payments to all governments, and requiring governments to publish their income from companies
• Ensure minerals are sourced legitimately, and not plundered from conflict insecure areas

• Increase transparency in land transactions, and for such transactions to respect the property rights of local communities
• Roll back protectionism and agree new trade deals to boost growth
• Cut bureaucracy at borders, particularly in the global south

• Publish official information about laws, budgets and spending to enable citizens to hold them to account

Prime Minister David Cameron said G8 leaders have agreed "to get to grips with tax evasion" and made real progress in "tax, trade and transparency."

G8 leaders have been sporting open neck shirts at this year's summit in Fermanagh, at the request of Prime Minister David Cameron, the Evening Standard reports.

Chancellor George Osborne explained:

"I did what I was told to do which was turn up in what they call ‘smart casual wear’ – I followed to the letter.

"The interesting thing about this conference… is, it is informal. Despite the enormous fuss that goes with having a conference like this, despite the huge media presence, actually when you get into the hotel it’s quite intimate and informal.”

The White House issued the text of a US action plan on beneficial ownership.

The American document requires details of companies' ownership to be accessible to tax authorities on a central register, but leaves it to individual US states to decide whether to make the register public.

It is hoped that an international agreement on new tax rules will make it more difficult to set up companies in offshore tax havens which carry out no business activities but are used to conceal the ultimate owners of taxable assets.

Following discussions with the leaders of the G8 countries and Chancellor George Osborne at the Lough Erne summit, David Cameron said an agreement had been reached on a UK action plan to prevent misuse of companies and legal arrangements.

The plan, published by No 10, commits Britain to using legislation to ensure that all companies know who ultimately owns and controls them and to require them to obtain and hold adequate, accurate and current information on their beneficial ownership.