The Fair Tax Mark

Screen-shot-2014-02-19-at-16.09.27Today sees the launch of a new accreditation scheme for businesses – the Fair Tax Mark. It aims to reward those who are transparent about their tax affairs and act responsibly. It’s been developed by members of Ethical Consumer and the Tax Justice Network, Richard Murphy et al. It has been deliberately kept simple so that smaller businesses can participate, and it is initially aimed at UK based companies rather than international corporations, which is more complicated.

It’s not the first time such a thing has been attempted. A previous effort ranked a range of retail companies according to three tax transparency criteria. It didn’t catch on, with critics asking who had decided what a ‘fair’ amount of tax was. Wisely, it has been rethought fairly fundamentally. It is no longer a badge given out by tax campaigners, but a certification that companies can gain.

In that sense it’s closer to FSC wood or Fairtrade certification. Companies that wish to be recognised as transparent in their tax affairs can apply and then use the mark in their communications. It works with business and rewards them, rather than sitting in judgement over them. Businesses that take pride in paying their contribution will have a clear and simple way of saying so to customers, and consumers who care about supporting ethical businesses will have another tool at their disposal.

Given that tax and transparency is a big issue at the moment, it may well be adopted. Unity Trust Bank, Mid-Counties Co-op and the Phone Co-op are the first three companies to pioneer the mark, and those who trade on their ethical contributions will no doubt be interested.

Of course, the usual downsides of accreditation marks apply here too. They take a certain critical mass before anyone starts noticing them. They take time to get established – Fairtrade and FSC took a decade to really make an impact. There are a dozen other badges about, from the Red Tractor to Fairwear to Soil Association certification and many consumers don’t really know what these mean. Since the Fair Tax logo doesn’t exactly say ‘accounting transparency’ (and neither does the name, come to think of it), it may just join that long list of only vaguely understood certifications.

As my brother and I highlighted with our satirical ‘unfairtrade logo‘ a few years ago, it also makes a virtue out of what should be standard practice, while those that choose not to be transparent suffer no penalty. Wouldn’t it be great if companies were all ranked on their ethics and had to display the results on their doors, the way food outlets display their hygiene ratings?

It’s a philosophical point rather than an objection, but it shows how these sorts of certifications are not enough in themselves, and need to be accompanied by measures to raise accountancy standards and close tax loopholes. Fortunately, there’s been a fair amount of progress on that front recently, and it’s certainly on the political agenda.

All of which makes it an opportune moment to launch a public-facing campaign that draws attention to business transparency. We will have to wait and see whether the Fair Tax Mark catches the public imagination, but I’ll certainly be looking out for it.

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10 Comments on “The Fair Tax Mark”

  1. DevonChap February 20, 2014 at 5:33 pm #

    And there was me thinking that the fair tax mark was not losing in court to HMRC.

    • Henry Law February 20, 2014 at 9:37 pm #

      That was my reaction too. If it is not illegal how can it be wrong? If legal is not moral then there may be a case for changing the law, but this would have to be demonstrated. Murphy and Co have not focused on a possible incongruity between legal and moral/just.

  2. Jeremy February 21, 2014 at 9:57 am #

    HMRC doesn’t have jurisdiction in Luxembourg or Hong Kong, companies can afford more artful lawyers than HMRC can, and in every sphere of life there are plenty of things that are legal but entirely wrong.

    I do agree with you that Fair Tax Mark has problems as a name though. What we’re really talking about is transparency, but I guess the public doesn’t care about accountancy standards. They want to know whether companies are paying their ‘fair share’ – but of course what ‘fair’ might actually be is entirely subjective.

  3. DevonChap February 21, 2014 at 8:33 pm #

    Ignore the imitations: this is the business.

    http://markoffairtax.wordpress.com/

    • Jeremy February 22, 2014 at 9:19 am #

      Hmm, a not especially funny pastiche. The Fair Tax Mark is a voluntary scheme for those that want to adopt it – why not let businesses make up their own minds about it?

      • DevonChap February 22, 2014 at 11:44 am #

        The basic thrust is correct though. Given that it involves lynch mob types like Richard Murphy who exaggerate and obfuscate to attack businesses they don’t like, this can be seen as a form of extortion – Pay me for this piece of paper (which I can manipulate to pass my friends and not my foes) or I send the mob round. I hope it is better than that. It certainly has been massively changed from when Richard Murphy first launched it as an attack stunt.

        Perhaps it will catch on, perhaps it won’t. I’m and Murphy Richards are not stopping businesses making up their own minds any more than you are by putting an article up promoting it. Freedom of speech cuts both ways.

        • Jeremy February 23, 2014 at 10:55 am #

          Is FSC accreditation a form of extortion too? Because that’s prettty expensive. Presumably Trustmark is just there to bully plumbers. And if the Tax Justice Network is a lynch mob, then chartered accountants are the mafia.

          You always leave your most extreme comments when there’s someone you personally dislike involved. Richard Murphy makes smoke come out of your ears, but there are other tax campaigners. The debate doesn’t begin and end with him. (For what it’s worth, I’ve fallen foul of his dubious statistics in the past and am wary of the man myself. I read a variety of views before writing about this, especially since I decided not to write about the Fair Tax Mark in its previous incarnation.)

          By all means laugh at the Fair Tax Mark if that’s all you’ve got to contribute. I don’t mind. I just think it’s a but pointless. The Fair Tax Mark is out there in the wild now. If businesses and their customers find it useful, it’ll fly, and it will raise the debate on accounting transparency. If they don’t find it useful, it’ll vanish without trace. It’s no skin off your nose either way.

          • DevonChap February 23, 2014 at 11:35 am #

            “no skin off your nose either way.” Absolutely right. But I can have a laugh if I like. Save me from the po faced moralising.

          • Jeremy February 24, 2014 at 10:35 am #

            Of course you can, it was your irate second comment that I was responding to in more length.

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  1. What we learned this week | Make Wealth History - November 9, 2014

    […] had my doubts that the Fair Tax Mark would be picked up by larger companies, but SSE have become the first FTSE 100 company to […]

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