A Fair Tax Pledge was launched today at the Fair Tax Conference in London as part of a campaign against tax dodging. The initiative is pioneered by the Fair Tax Mark, a non-profit community benefit society that works to encourage businesses and their stakeholders to make decisions that promote tax transparency and fairness.
The pledge gives members of the public the chance to show their support for fair tax. By signing the pledge they commit to declare all their income and that of their companies, openly, honestly and on a timely basis. Individuals also agree not to use tax heavens or tax avoidance arrangements to reduce any tax that they owe.
A campaign website provides a model letter for those who have an accountant which they can send to their advised to make clear their commitments and expectations. Once they have signed the pledge individuals will have the option of having their name displayed on a public list of signatures.
Launching the pledge, Richard Murphy, technical director at the Fair Tax Mark and tax justice campaigner, explained: “Unlike the Fair Tax Mark, with the Fair Tax Pledge, we don’t check what you say. We don’t ask you to show us your tax return. It’s up to you to be honest. Why do you want to sign? Because tax is too important to ignore.”
One of the signatories of the Fair Tax Pledge, MP Caroline Lucas, said: “Tax seems to have become a dirty word and I am proud to be part of this initiative to reclaim it.
“Paying tax is something I do because I believe in the redistribution of wealth, in giving something back, and in the principle that we are all collectively responsible for making society work for everyone. The Fair Tax Pledge is my promise that I’ll never try to dodge my taxes and I hope others will join me in pledging the same.”
Tax dodging is currently costing the UK economy £12bn a year.
Mr Murphy added: “The Fair Tax Pledge is something completely new in UK tax. It’s a way for a person to say that they want to pay their fair share. And, as importantly, it provides a way for those who use accountants to help them with their tax affairs to say that tax professionals should stop playing with tax abuse on their behalf. Nothing can make it plainer where a person stands on this vital issue.”
Meesha Nehru, programme director at the Fair Tax Mark, said: “Lots of individuals have looked at the Fair Tax Mark used by corporates and asked us how they can show their personal commitment to Fair Tax. The Fair Tax Pledge gives them a simple tool to use if they want to stand up for Fair Tax. We’d encourage everyone to sign and to ask their MP to sign too, for a start.”
The Fair Tax Mark as a differentiator
“Today is about building a case for businesses to pay the right tax”, said Paul Monaghan at the conference. He added that a recent survey had revealed how tax was the issue the public cared about the most, ahead of fairtrade, environmental concerns or care for community.
A survey conducted by YouGov with support from SSE showed that only 34% of public trust big businesses to pay right tax, only 6% trust companies to provide accurate information on tax.
Asked whom they did trust they mentioned the Treasury and independent certification schemes such as the Fair Tax Mark. “I was there at beginning of fairtrade and ethical investment and where the Fair Tax Mark is now is way ahead”, he said.
Also speaking at the event, Brandon Rennet, managing director of Finance at SSE explained why his company wanted to obtain the Fair Tax Mark accreditation. The SSE is one of the UK’s biggest 35 companies and one of the “big six” energy providers.
“We as the UK biggest companies have a very serious problem, actions of some lead to believe the majority are using the same clothes. From the perspective of a large com if we simply focus on the rules we might be in danger of missing a bigger point. This is about legitimacy. Taxes pay for public services and businesses need public services. We employ thousands of people in the communities, we need them to be safe, and we need smart and capable people. When they get ill they depend on the NHS to get them back on their feet. The success of business depends on public services, and making the case for responsible attitude from big business – it’s a way to share the profit with the society that makes it happen”.
The SSE published a tax policy, undertook country-by-country reporting, demonstrated what profit was made where and disclosed significant more detail, he explained.
He added: “Modern responsible businesses should create sustainable employment, pay fair share of tax, listen to customers’ opinions and to demonstrate they are serious about this at all times be accountable and transparency.”
Another energy provides, the Midcounties Co-operative was one of the pioneers of the Fair Tax Mark. The UK’s largest independent co-operative society, Midcounties partners with SSE on its energy business. “But we are taking some of their customers”, said chief executive Ben Reid.
He explained why the Midcounties Co-operative had applied for the Fair Tax accreditation.
“One of the messages sent by customers of the energy business was that they had switched because they wanted a more ethical alternative, tax one of the issues they were concerned about.”
“We, at Midcounties actually do believe that co-ops should take a lead on tax. The co-op is part of the community therefore it should pay its fair share.
“We made contribution to community groups of 13.6m. We paid our tax and equally we pay into the community.
“We recently they joined the tax dodging bill campaign, trying tot take this forward. I think we made great progress in the last year,” he said, adding that if the government was on their side they might see some real shift.
Rachel Turner, sustainability and communications manager at SSE added: “it was something different for us, there are risks, but we’re going to play on. We need to try, we are not convinced we will change the conception of big business or energy companies, but that’s not the point.”
In a special workshop at the conference Co-operatives UK secretary general, Ed Mayo looked at how co-operatives could use the Fair Tax Mark s a differentiator.
He said: “We were really proud that we were the first to adopt this. Typically, we may be less payer of tax, as social businesses, co-ops are there to create member value so may not be involved in some of the taxation that other companies are involved in and don’t have some of the complexities in terms of tax.
Mr Mayo added that customers needed to know what the Fair Tax Mark was. There are over 80 marks within the retail market today.
“It’s a tax transparency mark, a Fairtrade product is preferable to a non-Fairtrade product,” explained Richard. While customers might not know everything about the supply chain, they will prefer a Fairtrade product to a non-Fairtrade product. The best example is the SSE, he said, as they were determined to obtain the accreditation to differentiate themselves among the big six energy providers.
“For the Phone Co-op is the same. As a company working in telecommunications there’s a tenancy to be seen as part o the same sector and this enables them to say they are different.”
Ed Mayo added: “If there’s a good reason for you to want to differentiate yourself as a business, then the Fair Tax Mark is in some ways a good and the latest way to do that. But at the moment not known widely at consumers level.” He added that companies involved should pool data to understand how to reach customers in the right way.