Global Tax 50 2016: Meg Hillier

Meg Hillier was also in the Global Tax 50 2015

This is Meg Hillier's second year in the Global Tax 50, having been included last year for leading the UK's influential public accounts committee (PAC).

The PAC is well-known for hanging companies out to dry over their tax affairs, and this year was no different as it scrutinised companies, including Google, as well as UK revenue authority HMRC. Hillier also called for a probe into the tax affairs of football manager José Mourinho in December, after it was alleged that he used the British Virgin Islands (BVI) to avoid paying tax in the UK. Within days, HMRC Chief Executive Jon Thompson called for a review of tax avoidance in football.

This has been an active year for Hillier and one of her most important lines of work, carried out largely behind the scenes, has been to bring together public accounts committees and finance committees from parliaments around the world to work together on tax issues.

"I was out at the OECD in May and we had a letter pushing for more tax transparency, public country-by-country reporting (CbCR), currently signed by 11 chairs of EU [committees similar to the PAC]," Hillier told International Tax Review.

"We've been working with European colleagues, and now we're trying to push it beyond that. The OECD has done some very good work, but they are working with governments," she continued.

"Governments have to go cautiously if they do want to make change, but we can push for less caution, if you like. We can channel the palpable anger about the fairness of the tax system and what people pay, and make sure that we're pushing for change from our own parliaments. We've got an informal network of PAC and finance chairs who I can pick up the phone to."

Hillier's work has led to the first Global Tax Transparency Summit, hosted by the UK PAC, which took place on December 9, as this issue of International Tax Review was going to press.

The summit brought together parliamentarians from 30 jurisdictions with a combined population of more than 2 billion people, with many signing a concordat urging governments to support public CbCR – an initiative stemming from the OECD BEPS Project for which the UK has already created an implementation instrument.

Most notably, among the list of attendees to the conference were representatives of the British overseas territories Bermuda, the BVI and the Cayman Islands, as well as crown dependencies Guernsey, the Isle of Man and Jersey. These jurisdictions feature heavily in many international tax planning structures (the crown dependencies mainly for personal tax). More than half of the companies listed in the Panama Papers are registered in the UK, including more than 100,000 in the BVI.

Although the UK government, under former Prime Minister David Cameron, made a lot of noise internationally about supporting international efforts to tackle tax avoidance and evasion and publicly decried 'tax dodging' companies in the UK, its overseas territories were always the elephant in the room. Given that Cameron's late father was named in the Panama Papers for owning an offshore fund based in the Bahamas (not a UK territory), this is perhaps unsurprising.

In the media frenzy sparked by the Panama Papers, Jeremy Corbyn, the leader of the UK opposition Labour Party, called for Cameron to consider imposing "direct rule" on overseas territories and dependencies if they do not comply with UK tax law. While this is unlikely, it is not unprecedented – the UK, under Labour, imposed direct rule on the Turks and Caicos islands for three years after corruption was found to be rife, only returning the jurisdiction to home rule in 2012 after tax information sharing rules were implemented.

While Corbyn's proposal is unlikely to be realised any time soon – his party, of which Hillier is a member, is languishing in the polls. Hillier's softer approach of including representatives from tax havens in efforts to increase transparency could help the political party to thrive once again.

"Especially if I'm speaking overseas or to an international audience, [there is] absolute, complete agreement when I mention that the public want this," she said of greater tax transparency around the world. "People say that it's what the public is saying in their countries too. There is a big public movement out there, and we are the channel for that."

Another initiative Hillier has worked on is the Fair Tax Mark, an organisation that bestows its mark upon companies meeting its criteria, which relates to the transparency of its structure and ownership, tax policy, open accounts, public CbCR for multinationals and tax paid. So far, 20 UK companies have the Fair Tax Mark, with the largest businesses being broad-based energy company SSE, which is part of the FTSE 100.

Speaking as SSE was awarded the Fair Tax Mark for the third year running, Hillier said: "The public will no longer accept secret, complex tax arrangements by companies. SSE is setting the bar for other companies by openly supporting fair tax. More companies need to follow suit."

Hillier told ITR that she hopes that the Fair Tax Mark can one day become something similar to Fairtrade products, which ensure a better deal for farmers of products like bananas, chocolate and coffee beans in developing countries.

"When Fairtrade was first being championed it wasn't very mainstream, but now you can't go into a supermarket without being able to buy Fairtrade products," Hillier said. "Everyone talks about corporate social responsibility, and that has morphed into different things over time. Companies now have to have well-worn programmes, but actually fair tax, I think, is going to be part of corporate social responsibility."