Tax is ‘fast becoming the most toxic issue’ for successful companies

Britain’s corporate tax system is “broken”, according to Patrick Hosking, financial editor of The Times (paywall). “Nothing reflects this better than a tiny heart-shaped squiggle that is starting to appear in the advertising of British blue chips.”

The squiggle is the Fair Tax Mark logo, and SSE plc is the first FTSE 100 company to use it. The company has placed advertisements over the past few months in The Times, The Mirror, The Economist and elsewhere. One recent ad says that “at SSE we believe that everyone should pay their fair share of taxes”.

Hosking asks the obvious question – isn’t it up to HMRC to ensure that big companies pay the tax they should pay? SSE is not the only company to have sought the Fair Tax Mark and others are “in the queue”. Hosking adds:

… the public is so disillusioned with HMRC, while tax disclosure levels are so threadbare and opaque, that some companies are seeking the imprimatur of an energetic tax-campaigning group to verify they are not cheating society.

He also notes that unless properly explained, the absence of a corporation tax liability that may be entirely due to payment of tax-deductible pension contributions could be a “PR disaster”. Tax is fast becoming, he suggests, “the most toxic issue for successful companies”.

Hosking’s article coincides with this week’s launch of the Tax Dodging Bill campaign, calling on all political parties in the UK to pledge to introduce a new Bill in the first 100 days after the general election “to tackle corporate tax dodging and to make sure the additional revenue raised is used to fight poverty”.

This morning 70 tax campaigners and academics have called for stronger UK anti-avoidance legislation and public country-by-country reporting. Their letter to The Times is also behind a paywall but is available on the campaign website.