Looking back, 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. In 2013, we saw a year when governments started to respond (albeit meekly), with the UK’s pledge to close the tax gap and the G8 nations accepting the need to clamp down on tax avoiders at their summit in June. Hopefully, 2014 will be the year when consumers became 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 20th 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 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), a seven-strong panel of tax experts and specialists in corporate responsibility (CSR) and ethical consumerism.
The benefits of tax avoidance being reduced are immense, not just in this country, but particularly 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 have estimated that the lost tax revenue is enough to eliminate extreme poverty across the globe twice over.
Vivian Woodell, founder and CEO of the Phone Co-op, said: “Too many businesses in our industry use aggressive tax schemes to reduce the amount of tax paid. As well as being unfair competition for businesses like the Phone Co-op, which want to pay their fair share, this behaviour results in underfunded public services on which we all depend. The fact that the Phone Co-op is owned by its customers rather than investors brings this issue into sharp focus and is a key reason why we are supporting the Fair Tax Mark.”
The Mark has already secured the backing of some political heavy hitters. Margaret Hodge MP, chair of the House of Commons public accounts committee, has commented: “I think this is a fantastic idea … seeing customers vote with their feet is perhaps the most effective deterrent there is to companies engaging in tax avoidance or other irresponsible practices.”
Caroline Lucas MP, said: “This is a 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 concern of the public when it comes to business conduct. People have a real appetite for action on this issue. Starbucks has been forced into “voluntarily” increasing its contributions to HMRC 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, and we say that co-operatives and social enterprises are showing the way – again.
• For further details, visit www.fairtaxmark.net.
Paul Monaghan is corporate responsibility specialist at Fair Tax Mark.
READ MORE: Why is a £1bn co-op paying more tax than the £4bn Amazon?
In this article
- Applied ethics
- Caroline Lucas MP
- Corporate social responsibility
- Fair Tax Mark
- House of Commons
- Institute for Business Ethics
- Margaret Hodge MP
- Midcounties Co-operative
- Public economics
- Richard Murphy
- Tax avoidance
- Tax haven
- Unity Trust Bank
- Vivian Woodell
- United Kingdom
- Top Stories
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