The government accepted an amendment to the Finance Bill, which could see multinationals publicly declare where they do business and the tax they pay. Fair tax is an issue of concern for a number of co-operatives, which have been at the forefront of a campaign against tax dodging.
Pioneered by Labour MP Carolina Flint, the amendment calls on multinational enterprises to report to HMRC on the amount of revenue, profit before income tax and income tax paid and accrued. In addition, companies would be required to report on their total employment, capital, retained earnings and tangible assets for each jurisdiction in which they do business.
Also speaking during the House of Commons debate on the Bill, Labour/Co-op MP and chair of the Public Accounts Committee, Meg Hillier, added that by adopting the amendment the government would be “setting a tone for other parts of the world”.
The Co-operative Party has become the UK’s first political party to obtain the Fair Tax Mark for tax transparency.
In her speech Ms Flint gave the example of enterprises that had already published information about their tax affairs.
It is estimated that tax dodging is costing the UK economy £12bn a year. The Fair Tax Mark was launched in 2014 to encourage businesses to show that they are paying the right amount of tax, at the right time, in the right place.
Since its launch in 2014, the Fair Tax Mark has been awarded to a number of co-operatives and co-operative organisations including the Co-operative Group, the Midcounties Co-operative, Co-operatives UK, the Phone Co-op, the Radstock Co-operative and East of England Co-op.
The mark was initially pioneered by the first three businesses to obtain it, the Phone Co-op, the Midcounties Co-operative and Unity Trust Bank. The Fair Tax Mark team looks at whether a business is transparent about who owns it, what it does and where it is. The enterprise also needs to provide sufficient accounting data to suggest that its fair tax policy has been put into practice.
Paul Monaghan, co-founder of the Fair Tax Mark, commented on the amendment: “This is an amazing breakthrough for tax justice, not just in the UK but globally. We still need to hold government’s feet to the fire to make sure it is enacted, but we’ve now won the argument on the need for country-by-country reporting. The Fair Tax Mark has backed this amendment to the Finance Bill from the beginning, and it was most welcome that Caroline Flint cited our pioneering businesses as prime examples of why the time for action is now.”
In January the European Parliament has also voted in favour of a Fair Tax Payer label across the EU to tackle tax avoidance, a measure supported by the Fair Tax Mark.