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Creating Impact by Fighting for Fair Tax
In the United Kingdom and globally, the corporate tax deficit looms large. Billions of pounds are lost annually due to tax avoidance practices, which have unfortunately become the norm for many businesses, both large and small.
This not only undermines the principles of fair competition but also results in less money for public services, such as healthcare, transport and policing. However, by engaging in responsible tax practices, such as creating a tax policy that commits to acting within the spirit as well as the letter of the law, businesses can play a crucial role in addressing this challenge.
The Fair Tax Foundation: Driving change
The Fair Tax Foundation (FTF) is at the forefront of the fight against corporate tax avoidance. Through its pioneering initiatives over the past ten years, it is working to create a fairer and more equitable tax system in the UK and around the world.
More than an accreditation
While it may be best known for developing the Fair Tax Mark accreditation for businesses, this progressive and growing social enterprise does much more. Here’s a brief overview of its activities:
The Fair Tax Mark: Considered the gold standard of responsible tax conduct, this globally recognised accreditation is awarded to businesses that demonstrate exemplary tax practices. By encouraging more companies to join and helping them review their practices, the FTF is promoting a culture of responsible tax conduct. Accredited businesses include companies of all sizes, including some well-known names like SSE, Richer Sounds, Timpson, Orsted, Lush, Jupiter Asset Management and the Co-op.
The Tax Responsibility and Transparency Index: Alongside the Fair Tax Mark, the FTF has co-developed a pioneering tax index that enables multinational businesses to benchmark themselves against high-bar civil society frameworks, pending legislation and leading companies in five key areas of tax conduct.
Investor engagement: Due to increasing questions from institutional investors and asset managers, the FTF has developed an evolving set of key indicators of responsible corporate tax conduct for them to use when assessing and engaging with investee companies.
Legislative innovation: The FTF is actively involved in pioneering innovations in tax legislation that lead to fairer taxation for businesses. Its work has contributed to important changes in tax laws both domestically and internationally.
Fair Tax Councils: The FTF has created a declaration for UK Fair Tax Councils, which are local authorities that promote investment in people and infrastructure rather than corporate tax breaks. These councils also avoid awarding public procurement contracts to tax-avoiding companies.
Public awareness: The FTF plays a vital role in raising awareness of the problems caused by corporate tax avoidance and encouraging individuals and governments to advocate for a fair tax system. It is a go-to for journalists who want to understand the financial statements of tax-dodgers, such as Amazon and Apple.
The achievements and successes… so far…
In the past decade, The FTF has made significant strides in its mission to combat corporate tax avoidance. Here are some of its key achievements:
In the past decade, The FTF has made significant strides in its mission to combat corporate tax avoidance. Here are some of its key achievements:
- Growth in Fair Tax Mark businesses: More than 100 parent companies and 250 distinct trading businesses have been awarded the Fair Tax Mark, contributing more than £1.7bn in corporation tax annually.
- Increased corporation tax rates: Since the FTF's founding, the UK's headline rate of corporation tax has increased from 19% to 25%, surpassing that of many Scandinavian countries.
- Innovative tax policies: The FTF has been instrumental in advocating for and implementing innovative tax policies, such as Country-by-Country Reporting and mandatory disclosure of company ownership.
- Increased investor scrutiny: Several asset owners such as pension funds, including the UK’s default workplace pension scheme Nest, advocate investees pursue Fair Tax Mark accreditation. Asset managers are also beginning to use the Fair Tax Mark standards in their investee engagement.
- Impact of Fair Tax Councils: Some 63 Fair Tax Councils have collectively spent around £28bn on suppliers that adhere to ethical tax practices, promoting investment in infrastructure and people rather than corporate tax breaks.
A Growing impact
The FTF is a non-profit social enterprise committed to positively impacting society. By scaling up its operations and expanding its team, the FTF aims to further increase its reach and influence. With additional investment via its share offer, it can enhance its capabilities, engage more businesses, and drive even greater change in the fight for fair taxation.
With the funds from the share offer raise, the FTF plans to expand its back-office operations, create a new sales and business development team, broaden its product offering, and recruit and train new technical staff, realising the growth needed to increase its income from around £500,000 to around £2mn per year, in turn boosting its positive impact on society.
This is part of its plan to scale up operations to quintuple its corporate engagement in the UK and overseas, leading to hundreds of Fair Tax Mark accredited companies combining to make a corporation tax contribution in excess of £8.5bn per annum.
Here’s what some accredited organisations say:
“As a business, we are committed to treating our people and those around us fairly. Paying the right amount of tax, at the right time and in the right place is an extension of our commitment to our local communities, and being accredited with the Fair Tax Mark is a superb way to evidence that commitment” – an accredited business CFO
“The Fair Tax Mark demonstrates that [the business] takes its social responsibilities seriously by paying the right amount of tax to the authorities, which is mutually beneficial to all. Because we care about making life better, not only for our members but for everyone across society.” – an accredited business
Join the movement!
The FTF is a driving force in the movement for fair taxation. Through its tireless efforts, it is working to create a more equitable and just society. By supporting its work, we can help to ensure that corporations pay their fair share and contribute to a brighter future for all.
The Fair Tax Foundation share offer is currently open for investment on the Ethex platform. You can invest from £200, targeting an initial return of 6%—find out more here.
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