A huge step forward for tax transparency
On Monday evening, tax transparency in the UK took a huge step forward. Caroline Flint MP succeeded in getting an amendment into the Finance Bill which allows the Treasury to introduce public country-by-country reporting (CBCR) in the future. The amendment had strong cross-party backing, showing that ending corporate tax avoidance is supported by politicians from across the political spectrum.
Why does this matter?
CBCR helps us to know where companies are operating, and what they’re doing in those places. More specifically, it means we can see where they’re actually trading and making profits, where they’re ‘booking’ those profits (i.e. registering them with authorities), and how they’re taxes look in relation to this.
It’s crucial for tackling aggressive tax avoidance: it brings to light ‘arrangements’ which avoid paying taxes on profits in some places in order to pay them elsewhere where the tax rates are lower.
You can read a bit more on CBCR in our June post here.
Fair Tax Mark businesses are ahead of the curve again
Our accredited businesses which operate in more than one country are already publishing CBCR, showing that they’re ahead of the curve on tax transparency. They supported another attempt to get this into law back in December as seen in the letter above, and on Monday, Flint name-checked two of our businesses as leaders on this important issue.
Flint said, “I am very grateful to the 66 MPs from across the political spectrum who put their names to Amendment 145 and to the eight parliamentary parties that backed it. Without their support, we would not have been able to put such a compelling case to the Minister.
“I also received a great deal of support from NGOs including Christian Aid, ActionAid, Oxfam, Save the Children, CAFOD and the ONE Campaign. I hope that this measure can represent a small yet significant step forward in their campaigns for tax justice across the developing world. My thanks too to Tax Justice Network, the business-led Fair Tax Mark, and tax experts Richard Murphy and Jolyon Maugham QC, whose knowledge and expertise have been such a key part of this campaign.
“I am delighted that the Treasury recognised and responded to a common-sense measure with such widespread support. We have successfully moved the debate around PCBCR to not if, but when.”
We’re proud to support this amendment and hope it’s the start of a new era of corporate tax transparency – but there’s still a long way to go. It allows the Treasury to introduce public CBCR, but it does not mandate it, so time will tell whether we actually see it come into force. In the meantime, smart businesses will be getting their houses in order… and we might suggest gaining a Fair Tax Mark is a pretty good way of doing so.
If your business wants to join SSE, Lush Cosmetics and many more by gaining the Fair Tax Mark, email us today at firstname.lastname@example.org or fill in the contact form on this website.