Fair Tax makes its Mark
2012 was the year that the world woke up to the inequities of corporate tax avoidance, with the barefaced tax aggression of Starbucks, Amazon, Microsoft and others forcing the issue on to the front pages of the newspapers. In 2013 governments began to respond (albeit meekly), with Britain’s pledge to close the tax gap and G8 nations clamping down on tax avoiders, This year will, we hope, be the year that consumers become empowered to take action with their wallets – punishing the abusers and rewarding the payers.
The campaign for a more responsible approach to tax took a decisive step forward on 20 February, when Midcounties Co-operative, Unity Trust Bank and The Phone Co-op became the first businesses to be accredited by the new Fair Tax Mark, the world’s first independent accreditation scheme to address the issue of responsible tax. The Mark certifies that a company is making a genuine effort to be open and transparent about its tax affairs and that it pays the right amount of corporation tax at the right time and in the right place. It has been developed by a team of tax justice campaigners (including tax guru Richard Murphy) and a seven-strong panel of tax experts and specialists in corporate social responsibility (CSR) and ethical consumerism.
The benefits of reducing tax avoidance are immense. Not just in this country but also in poorer parts of the world – where three times more is lost to tax havens than is received in aid. The numbers are staggering: trillions of assets stashed away and billions of lost tax. Oxfam has estimated that the lost tax revenue is enough to eliminate extreme poverty across the globe twice over. New Internationalist was well ahead of the curve on this issue – devoting a magazine to the subject of tax justice back in 2008.
‘Last year we contributed the equivalent of 15 per cent of our profits to charitable causes and it makes no sense for us to undermine this by engaging in aggressive tax avoidance schemes, even when to do so would be legal,’ says Ben Reid, Chief Executive of Midcounties Co-operative, a business which has a billion pound turnover. In a similar vein, Managing Director of Unity Trust Bank Richard Wilcox notes: ‘Established as a bank to promote the common good, we believe a fair tax system is vital for society to thrive. Businesses have a duty to pay a fair share and to invest in the British economy and society as a whole.’
The Fair Tax Mark has already secured the backing of some political heavy-hitters, including Margaret Hodge MP, Chair of the House of Commons Public Accounts Committee. ‘Seeing customers vote with their feet is perhaps the most effective deterrent there is to companies engaging in tax avoidance or other irresponsible practices,’ she says. Green Party MP Caroline Lucas added that the Mark ‘is great news for consumers, for transparency, and for the principle that everyone should contribute their fair share’.
Recent polling from the Institute for Business Ethics has found that tax avoidance is now the number one public concern when it comes to business conduct. People have a real appetite to act on this issue. Starbucks has been forced into ‘voluntarily’ increasing its contributions to HM Revenue and Customs following customer anger. Nearly a decade ago, I wrote the foreword to a flagship report, ‘Taxing Issues – Responsible Business and Tax’, which argued that the subject needed to be a core concern of the CSR world. Back then it was ‘meekly accepted like the drunkenness of an unruly uncle at a family occasion’. Not any more.
For further details please visit the Fair Tax Mark website.
Paul Monaghan is the director of Up the Ethics and Corporate Responsibility Specialist at Fair Tax Mark.