Why is a £1bn co-op paying more tax than the £4bn Amazon?

“I think it’s quite strange that I’m paying more tax than Amazon,” was the astonished thought from Ben Reid as he looked through the financial figures of one...

“I think it’s quite strange that I’m paying more tax than Amazon,” was the astonished thought from Ben Reid as he looked through the financial figures of one of the UK’s largest internet retailers.

As the Fair Tax Mark launches, the Midcounties Co-operative chief executive, says his society paid £2.9m in 2012/2013 on a turnover of £1bn, while Amazon paid £2.4m on sales of £4.2bn in the UK.

Mr Reid adds: “It has managed to manoeuvre its way around the system. Maybe it should think about their wider social contribution to schools and health services that their employees are using.”

The launch of the Fair Tax Mark is something that co-operatives should be pioneering, he says: “When approached with the concept of the Fair Tax Mark, I thought this was something the co-op should take a lead in. Taxation money goes in to support our local communities.

“It’s been fairly clear over the last couple of years that the non-payment of tax by corporations has become an issue for the public. At members’ meetings I have been challenged as to whether we are complying with tax legislation. This matters to members.”

In an effort to strengthen its corporate and social responsibility (CSR) agenda, the society launched a public tax charter, which was approved by its board last July. The charter represents the co-operative’s approach to tax matters, such as confirming that tax planning will be consistent with the values of the society and that it will not embark upon any contentious tax schemes. This will bring them “into a position that is defensible,” according to Mr Reid.

It is also the society’s work around CSR that makes him think the global CSR world has missed a beat by not focusing on tax, saying it “would be such a good day” when the corporate world acknowledges that tax should be included in their programmes.

He adds: “The Fair Tax Mark is one of those things where I think to myself, ‘why wasn’t I talking about this 10 years ago?’. CSR does need to broaden its base.”

But Mr Reid does not hold his society up as a purveyor of excellence around tax. “Under the Fair Tax Mark scoring we achieved 16 of 20 – so there is still work to do.”

To gain a higher rating, the society needs to ensure it has evidence of tax practices and that it discloses how it defers tax.

The Midcounties CEO – and a director of the Co-operative Group – believes this is a natural area for co-operatives to engage with and his message to the movement is to “get on with it”.

“There shouldn’t be a co-op that shouldn’t get a Tax Mark,” he says. The journey of the Fair Tax Mark could also be contrasted with the initial struggle of the Fairtrade movement.

“I was around in those days,” says Mr Reid. “I was very proud of what the Co-op did at the time. People did say it’s not appropriate and that a price premium on Fairtrade would not work. It was not a PR exercise, and the same is true of the Fair Tax Mark today.”


READ MORE: How the Fair Tax Mark will make a difference to business

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