Paul Monaghan Chief Executive of Fair Tax Mark 28th February 2014 Blog Co-operative development Economy Share Tweet For many, 2012 was the year that the world woke up to the scandal of corporate tax avoidance, with the aggressive schemes of Starbucks, Amazon, Microsoft and others forcing the issue onto the front pages. And last year, we began to see governments respond, albeit in a very tentative way. The UK pledged to close the tax gap, and the G8 nations accepted the need to clamp down on tax avoiders at their summit in June. 2014 then needs to be the year that consumers become empowered to take action with their wallets – punishing the abusers and rewarding the payers. The campaign for a more responsible approach to tax took a decisive step forward on 20th February when Midcounties Co-operative, Unity Trust Bank and The Phone Co-op became the first businesses to be accredited by the new Fair Tax Mark, the world’s first independent accreditation scheme to address the issue of responsible tax. The Mark certifies that a company is making a genuine effort to be open and transparent about its tax affairs and pays the right amount of corporation tax, at the right time and in the right place. It has been developed by a team of tax justice campaigners (including author and journalist Richard Murphy), a seven strong panel of tax experts and specialists in corporate responsibility and ethical consumerism. The benefits of reducing tax avoidance are immense. Not just in this country, but particularly in poorer parts of the world – where three times more is lost to tax havens than is received in aid. The numbers are staggering: trillions of assets stashed away and billions of lost tax. Oxfam have estimated that the lost tax revenue is enough to eliminate extreme poverty across the globe twice over. Ben Reid, Chief Executive of Midcounties Co-operative, a billion pound turnover business, put its succinctly: “Last year we contributed the equivalent of 15% of our profits to charitable causes and it makes no sense for us to undermine this by engaging in aggressive tax avoidance schemes even when to do so would be legal.” In a similar vein, Vivian Woodell, founder and CEO of The Phone Co-op said: “Too many businesses in our industry use aggressive tax schemes to reduce the amount of tax paid. As well as being unfair competition for businesses like The Phone Co-op, which want to pay its fair share, this behaviour results in underfunded public services on which we all depend. The fact that The Phone Co-op is owned by its customers, rather investors brings this issue into sharp focus and is a key reason why we are supporting the Fair Tax Mark.” The Mark has already secured the political backing. Margaret Hodge MP, Chair of the House of Commons Public Accounts Committee has commented: “I think this is a fantastic idea…. seeing customers vote with their feet is perhaps the most effective deterrent there is to companies engaging in tax avoidance or other irresponsible practices.” Co-operatives UK and the professional association of chartered accountants, the ICAEW, have also come out strongly in favour of the Mark. Recent polling from the Institute for Business Ethics has found that tax avoidance is now the number one concern of the public when it comes to business conduct. People have a real appetite to act on this issue. Starbucks has been forced into ‘voluntarily’ increasing its contributions to HMRC following customer anger. Nearly a decade ago, I wrote the foreword to a flagship report ‘Taxing Issues – Responsible Business and Tax’, which argued that the subject needed to be a core concern of the CSR-world. Back then it was “meekly accepted like the drunkenness of an unruly uncle at a family occasion”. Not any more; and its co-operatives and social enterprises once again showing the way.