The Fair Tax Mark is about UK business leading the world in setting a new standard in responsible tax practice – from the smallest shop to the biggest multinational.
The Fair Tax Mark is the label for good taxpayers. It is for companies and organisations that are proud to pay their fair share of tax.
Wherever you see the Fair Tax Mark you can be sure that a company is open and transparent about its tax affairs and seeks to pay the right amount of corporation tax at the right time in the right place.
The Fair Tax Mark aims to offer businesses that know they are good taxpayers (or want to work towards becoming one) the opportunity to proudly display this to their customers.
Why is it needed?
In recent years, we have seen the naming and shaming of multinational corporations that have chosen to use tax havens and artificial structures to avoid paying millions in tax. These companies inflate their overall profits as a result whilst destroying the level playing field for fair competition from their rivals and robbing the public purse of vitally needed funds.
According to an estimation of the UK’s tax gap, around £12 billion is lost to the public purse each year via corporate tax avoidance.
This is more than the entire Home Office budget…and half of the UK’s housing and environment budget.
However we know that not all businesses are seeking to avoid paying the tax that they owe. In fact, as we have already discovered, there are lots who pay their taxes, are happy to do so and want the world to know that they do.
With 1 in 4 consumers wanting to boycott tax dodgers, its time to show them which businesses they can trust and to help them spend their money where it counts.
Our guiding principles
Fair Tax believes that a fair and transparent tax system is at the heart of any society.
A fair tax system is, we think, essential to a vibrant mixed economy that works for the benefit of all who live in a country. It is also crucial to a healthy, functioning democracy.
‘Fair’ is a subjective term that is open to a wide range of interpretations. In our opinion when it comes to corporation tax ‘fair tax’ means that a business seeks to pay the right amount of tax (but no more) in the right place at the right time.
For businesses that trade solely within the UK, this means putting their accounts on public record to demonstrate their commitment to the transparency that is at the heart of fair tax. It also means making a public declaration of their commitment to fair taxation that says they will not use tax havens and artificial transactions to avoid tax. Finally it means explaining the tax that they pay in their accounts and having a tax rate that is reasonably close to the UK headline rate that applies to their company, or which is explained when it is not.
For multinational corporations, fair tax means everything that it does for a nationally based company plus making tax declarations in the place where the real economic benefit of its trade occurs, at the time that it occurs, in accordance with the spirit of the law of the jurisdiction in question, and being able to demonstrate that fact in its accounts.
In other words, we think that if a profit is really made in the UK it should be taxed in the UK at the time it was earned and not be shifted to another country to be taxed there, or maybe not be taxed at all. If tax is paid in that way then we think that the company is being fair.
Our aim is to help businesses communicate more clearly about tax.
Businesses can choose whether or not to tell us about what they are doing. However, as tax is an issue that affects all of us, we believe we have a right to know what companies are up to and that they have a duty to tell us. We think that duty comes from the fact that companies are granted the right to trade in the UK without having to pay their debts if they go bankrupt and that this privilege has to be paid for through taxes.
A Fair Tax business seeks to pay the right amount of tax in the right place at the right time and can be held to account on its tax behaviour by the public based on the information it publishes.
The Fair Tax Mark Criteria assesses the information that businesses provide in order to measure their level of transparency and the quality of their tax disclosure as well as their tax rate.
Three different criteria are used depending upon the type of business we are looking at as their circumstances differ quite significantly in each case:
- Businesses that solely trade in the UK
- UK-owned multinational businesses
- Foreign-owned multinationals with subsidiaries in the UK
At present we are only assessing companies in the first group. We will add the other categories later. The Criteria are subject to an ongoing process of development and are likely to change over time.
The constantly evolving criteria has been independently verified by a group of technical experts, and developed in consultation with business, legal and accountancy professionals.
This multi-stakeholder group is drawn from a cross section of tax experts and ensure that the criteria are robust, trustworthy and reliable.
Read more about our advisory group.
Who we work with
We’ll work with any business that wants to improve their tax policy or already has a responsible tax policy. Please contact us if you are interested in being awarded a Fair Tax Mark.
Discover more about those businesses we currently work with – meet the Fair Tax Pioneers.