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With three-quarters of consumers saying they would prefer to buy from a company that pays its fair share of tax, Fair Tax Mark’s Paul Monaghan says doing the right thing makes business sense
The UK’s largest listed water company, United Utilities, has just joined a growing group of responsible businesses and become a certified Fair Tax Mark organisation.
The Fair Tax Mark is an independent benchmark, where businesses have to reach exemplar standards of responsible tax conduct. The vast majority of businesses that have secured the Fair Tax Mark have made substantive changes to secure accreditation: be that a new public tax policy, significantly enhanced tax reporting, the onshoring of economic activity or the closure of subsidiaries connected to tax havens. Securing the mark can take time for some businesses, but when an organisation achieves the standard, it’s a powerful external sign that it is committed to a different type of business behaviour; a new, better way of working.
We’re delighted to welcome United Utilities to the Fair Tax Mark, who now sit alongside a cohort of five other FTSE-listed companies, including fellow utility businesses SSE and Pennon Group, as well as Marshalls, Go-Ahead Group and Eurocell. Large, private businesses like Timpson Group, Lush and Richer Sounds also hold the mark, as well as numerous social enterprises, co-operatives and even small independent companies. In fact, the team here at the Fair Tax Mark has now certified more than 50 businesses, with over half of those in the last 18 months.
It has been estimated that as a result of corporate profits being shifted to tax havens, revenue losses in the UK amount to at least £7bn per annum
A common theme spanning all of those organisations accrediting is that the business leaders working within them tell us that achieving the Fair Tax Mark standard is not only the right thing to do, but is good for business. Recent polling, which the Fair Tax Mark commissioned ICM to undertake, backs up the business leaders’ thinking.
The polling about people’s attitude to tax has shown record levels of concern among the public about the use of tax avoidance practices by business in the UK. It also shows that more people than ever before would change who they shop with to favour a business that is Fair Tax Mark certified.
More than three quarters of people would rather shop with (77%) or work for (78%) a business that can prove it is paying its fair share of tax – in both cases, up eight percentage points on 2018. An increasing number also said that it was important to celebrate businesses that can demonstrate good tax conduct and shun the artificial use of tax havens and contrived tax avoidance practices, up six percentage points on 2018, to 75%.
Record numbers of consumers also said they would switch the businesses that they use to one that has the Fair Tax Mark (up by 11 percentage points to nearly two thirds of respondents, 62%).
For those of us involved in the tax justice movement these numbers are a positive sign, but also a reminder to us that we need to make more noise – celebrating and championing the organisations that are playing fair when it comes to tax, and making sure that consumers know and understand who they are and why they should support them.
In an age where convenience and price are key drivers affecting consumer choice, we need to expose the hidden costs to each of us when we opt to shop, or buy services from, a business focused solely on maximising profit at the expense of contributing its fair share of tax. It has been estimated that as a result of corporate profits being shifted to tax havens, revenue losses in the UK amount to at least £7bn per annum. Just think of the nurses, doctors and teachers we could employ, or the renewable energy infrastructure we could build, if that tax was paid as it should be.
It’s time to change the narrative around tax: too often it’s presented as a burden. We must instead present tax payments as a badge of pride
This responsibility to support businesses doing the right thing about tax isn’t just about individual consumers. Responsible behaviour around tax needs to be at the heart of all procurement models, whether private businesses or public services. We’re incredibly proud to have a growing number of leading UK businesses certified with the Fair Tax Mark, highlighting a different way to approach tax practice within a successful business.
Obviously some aspects of utilities are natural monopolies, so it is right and proper that businesses in this sector are held to the highest standards of transparency and responsible tax conduct. Here at the Fair Tax Mark we firmly believe that businesses like United Utilities that voluntarily hold themselves accountable to a higher standard can only have a positive impact.
After all, United Utilities provides water and wastewater services to 3 million homes and 200,000 businesses across the north-west, has a workforce of more than 5,000 and a major, multi-billion pound investment programme. The way it acts as a business has a profound influence on the social, economic and environment well-being of the north-west region of England and beyond. Getting the message out about the importance of paying your fair share of tax to that audience is huge.
Building responsible tax conduct into both consumer and procurement behaviour is a twin-track approach towards developing a more responsible approach to the issue of tax here in the UK. It’s time to change the narrative around tax: too often it’s presented as a burden or a frustration a business must endure. We must instead present tax payments as a sign of success and a badge of pride, showing that an organisation is contributing to the vital public services all businesses and communities need to thrive.
Paul Monaghan is chief executive of Fair Tax Mark.
United Utilities Fair Tax Mark Eurocell Marshalls Go-Ahead SSE Responsible Business Pennon