After being pioneered by co-operatives, the Fair Tax Mark has established a formal relationship with the sector.
The Mark is a certification for organisations that deal with tax fairly and transparently and, when it launched last year, Midcounties Co-op and the Phone Co-op signed up to the scheme .
To build on this connection, Co-operatives UK has created a formal link to provide support for co-ops in signing up to the mark, along with the publication of a set of voluntary guidelines and a 20% discount on the application fee.
Ed Mayo, secretary general of Co-operatives UK, said: “Tax avoidance is the number one public issue today and what the Fair Tax Mark offers customers is a way to judge where they spend their money. With tax income tight and austerity the dominant response, it would be wonderful to make fair tax the norm for large businesses over the next 10 years.
“Co-operatives have always been market leaders on issues of fairness, whether it’s working hours, Fairtrade or ethical investment practices. As home-grown businesses, not a single co-operative we know of has engaged in aggressive tax avoidance. That’s why we are seeing the sector coming together to lead the way on fair tax.”
He added: “Fair tax is the new fair trade. I was one of the team of founders of the Fairtrade Mark over 20 years ago, and since that time it has changed lives across the world. The Fair Tax Mark – pioneered by leading co-operatives, just as fair trade was, but open for every company –can also change lives, here in the UK. All it takes is for consumers, people who are taxpayers themselves, to back the companies that pay what they owe.”
Ben Reid, chief executive of Midcounties Co-operative, commented: “The Institute for Business Ethics recently found that tax avoidance is now the number one concern of the public when it comes to business conduct. As a values-led and ethical organisation, we believe that we should pay the taxes that are due and not engage in aggressive tax avoidance schemes, even if legal.”
Richard Murphy, tax campaigner and Fair Tax Mark director, said: “The UK public now think that paying fair tax is one of the most important things a business can do. They rightly expect business to pay its share, just as they do.
“To have a whole UK business sector declare its support for Fair Tax is really good news. The UK public will now know that co-ops are committed to paying their tax, and I hope they reward them with their business as a result.”
The Fair Tax Mark criteria
1. Does the co-operative publish a full set of accounts?
2. Is there clear evidence of what the co-operative does either within its accounts or on an easily identifiable website that it runs?
3. Is there clear reference to a trading address in the accounts?
4. Is the co-operative transparent about its structure and relationship and clear who all the beneficial owners are?
5. Are the names and addresses of all directors provided either in the accounts or with the Financial Conduct Authority?
TAX RATE, TAX AVOIDANCE AND DISCLOSURE
6. Does the co-operative have a tax policy either on its web site or referred to in its accounts? Does that tax policy say that the co-operative will not: Abuse tax havens? or Undertake tax avoidance?
7. Is the co-operative’s average tax rate within 1% (4), 1-3% (3), 3-5% (2) or 5-7% (1) of the headline rate?
8. Does the co-operative provide a numerical tax reconciliation of its actual current tax charge to the current tax charge that might be expected for the year at the tax rate applying to the profits of the company?
9. Does the co-operative provide a written explanation as to why its current tax charge differs from the charge expected for the year at the tax rate applying to the profits of the company?
10. Does the co-operative provide a written and numerical explanation of its deferred taxation liabilities?
11. Does the co-operative disclose the total pay including bonuses of the company directors?
Bonus questions, not yet scoring but likely to do so in future:
12. Does the co-operative separately disclose its corporation tax and other tax liabilities owed or owing in its accounts?
13. Does the co-operative separately disclose its corporation tax paid or received in the year in its accounts?