Every time we shop, we have a choice to make. Do we choose to shop with businesses who pay their fair share of tax, or do we choose to contribute to the profits of firms registered in tax havens, with complex structures that help them pay lower taxes? John Lehal 22nd October 2019 Blog Economy Share Tweet When I pick-up my morning caffeine fix, I’m faced with a choice at the station: Starbucks or AMT Coffee. It’s actually an easy decision to make. Off the back of an income of £387m last year, Starbucks paid just £4m of tax in the UK. Like many global firms, Starbucks has structures involving parent companies and subsidiaries and complex licensing arrangements, which means profits can be repatriated overseas, and little tax paid at source. Contrast that with AMT Coffee, operating through a single corporate entity, and paying tax on UK-generated profits in the UK. The conduct of some international businesses has elevated the issue of international tax justice higher up the political agenda in recent years. Whilst Apple, Alphabet and Amazon are locked in a race to become the first trillion-dollar business, with their offshore vehicles, licensing arrangements, parent companies often based in tax havens, and an army of legal and tax advisers, they pay barely any tax in the UK. Public attitudes are also shifting. According to polling by the Institute of Business Ethics, corporate tax avoidance is the top public concern about business behaviour, coming ahead of executive pay and data privacy. How can it be fair that five of the UK’s biggest co-operatives pay more tax than Amazon, Facebook, E-Bay, Apple and Starbucks combined? I ran a business for over ten years. We were proud to be amongst the first Living Wage employers and signatories of the Prompt Payment Code. For us, business ethics came first. Doing things right as well as doing the right thing. We made 26 payments annually to HMRC for our monthly PAYE, quarterly VAT, and business rates. It was the single biggest “cost” to the business. But in fact it was never seen as a cost. It was our contract with society – our contribution towards the infrastructure we used daily, the public services our staff relied on, and our welfare safety net. And while small and medium sized businesses make this contribution, multi-national corporations from online retailers to fast food chains hide behind opaque legal structures to avoid paying their share. Just think of all that lost revenue for our public services from this profit shifting? It’s why the Fair Tax Mark is an idea whose time has come, and why we should celebrate the 50 pioneering organisations, many of our larger co-operatives amongst them who have been through the assessment and accreditation process. And it’s time for us as a movement to think how we make Fair Tax Mark a mainstream expectation, not a nice-to-do. The single biggest thing an incoming Labour & Co-operative Government can do is hardwire the Fair Tax Mark into public sector procurement. So whether you are bidding to provide electricity to a school, for the coffee concession in the hospital lobby, or are a train franchisee, you have to have the Fair Tax Mark to be considered. The Co-operative Party (the UK’s first political party to achieve the Fair Tax Mark) has spearheaded some fantastic campaigns in recent years: from food justice to modern day slavery. As we pick themes for 2020, I hope tax justice will be selected. There is so much we can do practically as co-operators. We can urge local businesses to work towards adopting the Fair Tax Assessment. We can follow Oxford’s lead to become a fair tax town. Labour & Co-op Councils can adopt the fair tax charter. And we can even use Fair Tax Week in July to do all three! Finally, we need to elevate this debate to consider how it can be part of a wider contract between the state, society and responsible business. From paying the living wage to reducing carbon emissions, from paying suppliers promptly to recognising trade unions, there is so much we need our businesses to drive forward. We need to recognise and celebrate the businesses that operate ethically. So well done to Go-Ahead, Lush, Timpsons, SSE and the many co-operatives. Now let’s ensure we are the driving force behind growing this movement in the years ahead.