This is one of those posts that updates an earlier stream of thought, in this case on corporate payment of tax. There have been some interesting developments since my top tips on tax were published.
The first update is a really interesting development – the creation of the Fair Tax Mark. Yep, it’s like it sounds. Kinda like the Fair Trade mark, but for companies that want to be somewhat transparent on how much tax they pay, and wish to deliberately not take advantage of low tax off-shore jurisdictions.
The CEOs of the first tranche of Fair Tax Pioneers have even been crazy enough to allow their names and pictures to be published, along with quotes of why they think paying tax is a good idea. The pioneers include Midcounties Co-operative, Unity Trust Bank and The Phone Co-op.
Fair Tax Mark provides companies with templates on how to do tax disclosure well. Their frameworks currently expressly focus on companies operating in the UK (and perhaps that’s for obvious enough reasons) but presumably with a little bit of adaptation, other countries could achieve the same goal, or the Fair Trade Mark has already said that it plans to expand globally after a UK ‘trial’ period.
Mallen Baker, has published some insights and reflections on how companies are changing their approach. He identifies Google’s relative increased tax bill in the UK a doubling of its previous tax payment in the UK, according to the Independent, and also gives some thoughts on that approach. He usefully highlights that pursuing certain kinds of business mantras will lead to creation of necessary reactions.
Sustainability Consultancies in on the Act too!
There is also an article published by Forum for the Future and written by Paul Monaghan (director of Fair Tax Mark) on whether 2014 is the year of tax responsibility. Of course, that has a ring of self-interest about it (just like my blog post on my new book on materiality), but it doesn’t mean that it isn’t a good and useful read on the issue.
Corporate Citizenship has also taken the step of providing companies a significant guide on the issue of corporate tax. which is an overhaul of their 2011 publication on the same topic. The publication even includes a business process to follow on tax.
That’s framed by their focus on overall economic contribution, which is a front-foot communications strategy for convincing listeners that the company is a good and valuable citizen. That’s a useful approach to some extent, but the protests directed at the largest tax avoiders show that using traditional defenses like provision of jobs and total economic contribution aren’t as effective as they used to be.
However, their 10 questions provided for use by companies are top notch and will drive good behaviours if taken seriously.
The Guardian Tax Avoidance Hub
The UK newspaper The Guardian has also kept up a pretty interesting series of articles on a Tax Avoidance Hub. There is some good stuff in there, with a variety of perspectives. If you are interested in this area, this isn’t a bad start.