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Tax Reporting and Transparency Trends

A study of FY22/23 year ends for the FTSE350

Tax is a central part of our public lives, funding vital services. As businesses increasingly focus on their purpose and respond to Environmental, Societal and Governance (ESG) considerations, it is right that tax reporting and transparency is a key consideration.

In our latest report we have examined trends across a sample of the FTSE350 to see how businesses are responding to the transparency and ESG reporting demands from authorities, shareholders and stakeholders. 

At a glance


  • 58% of the companies we reviewed included no disclosures on UTPs or tax-related contingent liabilities in their financial statements
  • Of those companies that did include disclosure, 71% quantified their tax provisions 
  • 42% of companies in our sample provide detail on how they identify, manage and internally report their tax risks
  • 71% of groups publish some information on the taxes they pay, with 23% breaking this down further by country and/or tax
  • Tax and transparency is a key matter in the independent external auditor reports of 11 groups within our sample.

Reporting in a complex landscape


The disclosure of tax in annual reports and transparency statements is an increasing area of focus for companies and their stakeholders. There is growing complexity in the tax system - with initiatives such as the OECD Inclusive Framework’s Pillar Two - at the same time as a heightened expectations around disclosure and transparency, linked to the broader Environmental, Societal and Governance (ESG) agenda.

With these factors in mind, we reviewed the reporting trends of 52 FTSE350 companies across industry groups across two related dimensions: tax reporting and tax transparency.

From a tax reporting perspective we focused on some of the most judgemental and complex areas of tax reporting in IAS 12, including:

  • Uncertain tax positions
  • Discussion of future tax rate drivers or risks
  • Tax estimates and judgements
  • Deferred tax asset recognition

Our analysis of tax transparency statements we considered five key themes:

  • Context – setting the scene
  • Approach – your tax fundamentals
  • Key matters – What shapes your tax profile
  • Data – the taxes you pay (and where)
  • Assurance – giving confidence in your commitments

You can access our full findings here.

Uncertain tax positions 


Uncertain tax positions (UTPs) relate to items of income or expense where the law is unclear on how those items should be taxed or deducted, or where judgement is involved in determining the appropriate tax treatment.

The most common nature of tax provisions and contingent tax liabilities was transfer pricing (32%) followed by matters related to the EU Commission’s State Aid investigations into the United Kingdom’s Controlled Foreign Company rules (26%).

Tax transparency standards 


Groups are increasingly expecting to align their Tax Transparency disclosures behind one or more transparency standard as shown from the chart below.

Context and the link to ESG

Tax Transparency disclosure must be considered within context. This can be broken down into three key areas:

1. Where groups are choosing to publish information;
2. The strength of connection (if any) to wider ESG reporting; and
3. What groups are including by way of business context.

Of those surveyed, around a fifth are now publishing a more detailed Tax Transparency report (often including numerical data) and a similar number are including some references to Tax Governance / Tax Transparency in their wider sustainability report.

This link to broader ESG themes works both ways and we noted that many Tax Transparency disclosures referred to broader sustainability targets - and in some cases, linked back to the group’s Sustainability Report. 


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