Fair Tax Mark article in The Times

There is an excellent piece in The Times today by Patrick Hosking entitled: The corporate tax system is open to abuse but measures are afoot to plug loopholes.

As well as mentioning all the usual topics such as Google, Starbucks, Amazon, Ireland, Luxembourg, OECD, G20, Bermuda etc, it sets out some of the key benefits of Fair Tax Mark accreditation, both from a consumer and business perspective.

I identifies these as:

• A proactive route for companies to demonstrate, through an independent assessment, that they are “not cheating society”
• A means to differentiate themselves from competitors whose approach to tax may be more aggressive
• A mechanism to explain perfectly reasonable tax positions, which might appear to be indicative of “tax dodging”, but are in fact legitimate.

“According to Richard Murphy, the anti-avoidance campaigner and co-founder of Fair Tax, one applicant is pouring millions into its staff pension fund to fix a deficit. The payments rightly qualify for tax relief, but the effect is that it may pay no corporation tax at all for three or four years. Unless properly explained, that could be a PR disaster.” 

The article then goes on to say that there is real evidence of consumers “voting with their feet” on the tax issue, with businesses such as Costa and John Lewis saying they are experiencing a positive flipside of the woes of Starbucks and Amazon respectively.

It is clear that the public debate about tax is not going away. Patrick states “Tax is fast becoming the most toxic issue for successful companies”. This may be true, but the consequence of that is that tax is also a huge opportunity for responsible businesses to differentiate themselves.

I must of course declare an interest here, being an independent Fair Tax Mark Assessor, but the success of the Fair Tax Mark will be demonstrated not by me talking about it, but by the businesses seeking and attaining accreditation, and changing the way in which consumers make their choices.

“Of all corporate sins, tax avoidance is the one that most infuriates the public. A study last year by the Institute of Business Ethics ranked it higher than excessive boardroom pay or bribery and corruption.” 

The climate of mistrust in businesses is not going to be addressed entirely by the Fair Tax Mark, but for some businesses there could be a real opportunity here.