Fair tax proposals included in new Business Plan for Britain

Mary Patel, Movement Building and Outreach Manager at the Fair Tax Foundation, outlines the responsible tax conduct measures recently included in a new business plan for Britain.

With the UK heading for a general election in the coming months, a coalition of social economy organisations, dubbed the Future Economy Alliance, is calling on government to include responsible taxation measures in a new Business Plan for Britain.

Launched by the Alliance in parliament on 7 March, the plan sets out fixes to build a stronger, fairer, greener future for the UK. Just as many UK co-operatives and social enterprises are accredited with the gold standard Fair Tax Mark, the Alliance is championing responsible tax conduct and financial transparency as integral to an economy that works better for everyone. We’re delighted to see progressive business voices back calls for government to advance good practice, and further protect the economy from tax avoidance and economic crime.

Backing good tax conduct in public procurement

Right up the priority list is unlocking far more ‘social value’ from the c.£300bn spent each year by the UK public sector buying goods and services from supplier business. Public bodies from the NHS to central government and local councils should, the Alliance says, be allowed to meaningfully factor in ‘responsible tax conduct’ when deciding which business will win a contract, aligning with our UK public procurement ‘Big Fair Tax Ask’.

Our growing network of nearly 60 UK Fair Tax Councils, everywhere from Westminster to Newcastle, want to do just this and direct their spending towards firms that demonstrate a robust commitment to fair tax, but current public procurement rules are a block. Government can overcome this by making ‘responsible tax conduct’ an explicit social value criteria.

Good business calls for robust corporate transparency and anti-corruption efforts

What’s more, the Future Economy Alliance agrees that business of all sizes should be subject to meaningful corporate transparency so we can know exactly how much tax they pay here in the UK. At present, the vast majority of multinational enterprises such as Amazon refuse to disclose how much corporation tax they pay here or in any other country.

The Alliance backs our #ShowMeTheMoney campaign calling on government to mandate large multinationals to publish a breakdown of how much tax they pay here in the UK and across the world – known as ‘public Country-by-Country Reporting’. Alongside this it’s vital for tackling tax evasion and economic crime that small companies publish the fullest set of financial accounts too, so everyone from consumers and creditors can be properly informed. Fair Tax Mark businesses already disclose this information on a voluntary basis.

Adding their voice to calls from across the tax justice and anti-corruption movements, the Alliance also wants public disclosure of who owns and controls businesses supplying the public sector, with no hiding behind shady structures such as shell companies. Knowing who benefits from public contracts matters for discouraging bad practice such as tax evasion, fraud and corruption.



Corporate tax avoidance continues to harm the UK

Working towards a level playing field for responsible business should be a clear priority for any incoming government. The UK loses an estimated £12.5bn every year from multinational profit shifting alone. Add to this HMRC analysis that finds that ‘small business’ accounts for the largest portion – nearly half (46%) – of its UK’s tax gap shortfall, at a cost of £15.6bn per year. An under-resourced HMRC is struggling to keep pace and dodgy players game low-bar company reporting requirements to facilitate economic crime. The UK can ill-afford the damage all this does to support for vital public services and critical infrastructure.

Co-operatives and social enterprises pioneering fair tax conduct

Some of the many co-operative and social enterprises to hold Fair Tax Mark accreditation include major UK retailers The Co-op and Midcounties Co-operative, financial providers Coventry Building Society and Unity Trust Bank, ethical cleaning service Clean for Good, leading vegetarian foods wholesaler Suma and renewable energy developer Energy4All. All of which are proud to pay their fair share of tax and say what taxes they pay and where, meaning their claims around responsible tax conduct can be trusted.

We’re proud that Fair Tax accredited businesses encompass everything from SMEs to private firms, listed multinationals as well as many co-operatives and social enterprises. The diversity of our movement is part of our growing strength and shows that businesses of all shapes and sizes are proud to pay their fair share of tax.

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