With tax avoidance an issue of major public concern and media attention, the Fair Tax Mark is an opportunity for co-operatives to show that they pay their tax fairly and transparently.
The Fair Tax Mark was pioneered by co‑operatives including Midcounties and the Phone Co-op. Co‑operatives UK – following a mandate from the co‑op sector at its annual conference in 2014 – remains in partnership with the Fair Tax Mark to make it simpler for co-operatives to become accredited, including a 10% discount for Co-operatives UK members.
What is the Fair Tax Mark?
The Fair Tax Mark is a label for good taxpayers. It's for businesses and organisations that are proud to pay their fair share of tax.
Launched in 2014, the aspiration is that, wherever consumers see the Fair Tax Mark, they can be sure that a business 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 adopt the Fair Tax Mark?
Fair tax is the right thing to do. 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 not all businesses are seeking to avoid paying the tax that they owe. We do not know of a single co-operative engaged in aggressive tax avoidance.
Fair tax matters to consumers. Tax avoidance by large public companies such as Starbucks and Amazon have hit the news in recent years, and research from the Institute for Business Ethics found that tax avoidance in public’s number one concern about business behaviour.
Fair tax is a good fit with co-operatives and the Fair Tax Mark is an effective way for co-operatives to demonstrate that they are fair and ethical businesses. It was agreed at the co-operative sector’s annual conference, Co-operative Congress, that co-operatives would forge stronger links with the Fair Tax Mark and a formal partnership with Co-operatives UK, the network for Britain’s thousands of co-operative businesses, was launched in February 2015. Subsequently, an agreement was formalised to offer Co-operatives UK members a 10% discount on accreditation (applicable to all fees above Fair Tax Mark's entry level pricing band).
Co-operatives UK members Midcounties Co-operative, the Phone Co-op and Unity Trust Bank were among the first businesses in the UK to adopt the Fair Tax Mark.
How to adopt the Fair Tax Mark?
In order to be accredited with the Fair Tax Mark a business needs to meet a number of criteria around its accounting and reporting.
The criteria assess the quality of a business’s publicly available information on key tax and transparency issues. The precise criteria differ according to whether the business solely trades in the UK, or is a UK owned business trading in different countries. For each business type the criteria are divided into two main categories: transparency; tax rate, disclosure and avoidance.
To support co-operatives in adopting the Fair Tax Mark, the team at the Mark have worked with Co-operatives UK to develop a set of voluntary guidelines to take co-operatives through the process.