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With tax avoidance people's biggest concern when it comes to corporate conduct, the Fair Tax Mark’s Paul Monaghan says 40 firms, including SSE, Marshalls and Go-Ahead Group, have signed up to the Fair Tax Mark
The pressure on business to pay the right amount of tax in the right place at the right time has never been stronger.
Polling from the Institute of Business Ethics has found for the last five years that tax avoidance is the number one concern of the UK public when it comes to corporate conduct. Politicians from all parties are newly assertive and are now using parliament to introduce significant reforms; such as the mandatory public country-by-country reporting of profits generated and taxes paid, and enforced disclosure of the beneficial ownership of business (and not just in mainland UK, but also in tax havens and overseas territories such as the British Virgin Islands). Even regulators and courts are stepping up to the plate as never before: this month Apple will begin paying to Ireland the €13bn of taxes it was found to have illegally avoided over two decades and more.
The tide has finally begun to turn against the tax dodgers, but there is still much work to be done. Some €600bn of corporate profits continue to be shifted annually to tax havens, which leads to corporate tax revenue losses globally of €200bn per year and approximately £7bn of missing revenues in the UK. There has been no let-up in the almost daily stream of stories of evasion and aggressive avoidance, which both distorts the economy and undermines the opportunity for business to compete fairly.
Fair Tax Fortnight celebrates businesses that pay the right amount of corporation tax at the right time and in the right place
But there is also much to celebrate. Numerous companies seek to do the right thing and are proud to pay their fair share of corporation tax. They find it distasteful that less scrupulous competitors are trying to steal a march by not paying their due taxes, which is why this summer we are organising the first ever Fair Tax Fortnight. The fortnight (9-24 June) will provide a platform for the celebration of all businesses that pay the right amount of corporation tax at the right time and in the right place, and who overtly shun the artificial use of tax havens and contrived tax avoidance practices.
Fair Tax Fortnight will also explore the positive contribution made by corporation tax, which is often presented as a burden. But it shouldn’t be; not when considered against the huge array of public services it helps fund – from education, health and old-age care, through to flood defence, roads, policing and defence. It also plays a crucial role in holding the whole tax system together, helping to counter financial inequalities and rebalance distorted economies.
The fortnight will be supported by a dedicated online platform that will detail Fair Tax developments and events across the UK. Businesses and supporting organizations will be organizing events during the fortnight, which will be uploaded to and promoted.
Like all great ideas, it is built on the shoulders of giants. The Fair Tax Fortnight has been inspired by Fairtrade Fortnight, and we hope the former will do for tax justice what the latter has done for trade justice. Curiously, Fairtrade was itself inspired by the Woolmark quality label, which was commissioned by Australian sheep farmers in the 1960s to differentiate their natural products from the rise of nylon, polyester and acrylic.
We had to wait for the barefaced tax aggression of Starbucks, Amazon, Google to force the issue on to the front pages
Things have moved on remarkably over the last ten years. Back in 2006, whilst working as head of sustainability at the Co-op, I was involved in the ground-breaking report Taxing issues – Responsible business and tax, which argued that corporate responsibility professionals needed to recognize and tackle the enormous problems connected with rampant tax avoidance and evasion.
However, the report met with a deafening silence. We had to wait a further five years before the barefaced tax aggression of Starbucks, Amazon, Google and others forced the issue on to the front pages, and the world finally started to listen to the likes of Richard Murphy and John Christensen of the Justice Network.
Paul Monaghan: 'We shouldn't just pillory the bad ones.'
On leaving the Co-op in 2013, I took the opportunity to re-connect with the issue and Richard, who was (as ever) pushing the envelope with the idea of Fair Tax business criteria. We launched the Fair Tax Mark in 2014, reasoning that it was as important to identify and applaud the good guys as it was to single out and pillory the bad ones.
Some 40 businesses have now secured the Fair Tax Mark – including FTSE-listed corporations (such as SSE, Go Ahead and Marshalls), large private businesses (such as Lush and Winder Power), social enterprises (such as the Co-op and Ecology Building Society) and small private corporations (such as Paper Tiger and Combat Pest Control). Recent accreditations include high-street chains Richer Sounds and AMT Coffee – which means that around 4,500 shops and offices around the UK are now covered by the Fair Tax Mark. On top of that, we have a further dozen business progressing certification and we are starting to see the emergence of Fair Tax Marks in other countries.
But Fair Tax Fortnight will go beyond saluting Fair Tax Mark certified businesses. It will look to celebrate all businesses that pay the right amount of tax. We believe that many businesses are out there quietly progressing a responsible approach to tax planning, and it’s only fair that they receive due recognition. So if you are one of these, please get involved.
Paul Monaghan is chief executive of Fair Tax Mark, and executive director of management consultancy Up the Ethics.
Fair Tax Fortnight, 9-24 June 9-24 opens with a conference in London on 7 June. See here for details.
fair tax business ethics CSR Institute of Business Ethics Fairtrade Justice Network