£11bn Apple ruling shows the tide is turning over corporate taxation




This is one of a series of articles to mark Shared Economy, Shared Power, the Co-operative Party annual conference which runs from Friday 9 September to Sunday 11 September in Cardiff.

For a number of years, whether big firms pay a fair amount of tax has been the number one concern of the UK public when it comes to corporate conduct – and this is unlikely to change in the near future given the recent furore surrounding the European Commission’s finding that Ireland granted Apple a staggering €13bn (£11bn) of tax benefits which were illegal under state aid rules and, in effect, enabled the tech giant to avoid taxation on most of the profits generated by product sales in the entire single market.

But it is not all gloom and and nor is it the inevitable acceptance by nation states of the power of big business to call the shots. Not only has the EU shown an increased appetite to close tax loopholes, and bring business to account, but so has the UK. In fact, there is plenty of evidence to suggest that the tide may at last be turning over tax.

The UK even now has its very own Fair Tax Mark – an independent accreditation scheme for businesses who want to demonstrate that they are open and transparent about their tax affairs and pay the right amount of corporation tax at the right time and in the right place. A number of major FTSE-listed plcs have now embraced the mark (including SSE, Go Ahead and Marshalls); but, significantly, co-operatives and social enterprises (such as Midcounties Co-operative and the Phone Co-op) have also shown an amazing appetite to lead from the front – much as they did in the early days of Fairtrade.

The Fair Tax Mark has also worked with progressive politicians and campaigners to raise the bar more broadly. As of January, we’ve worked with Christian Aid on their Sourced Campaign and urged local councils to get tough with companies that dodge tax. Councils in England alone spend some £45bn a year buying goods and services from companies and that gives them a lot of influence over suppliers. We’ve seen Labour and Co-operative councillors quickly pick up the baton and secure resolutions to tighten up their procurement procedures in the likes of Manchester and Salford – and expect to see many more follow.

More recently, we supported Caroline Flint MP and her successful #ShowMeTheMoney amendment to the Finance Bill. This paves the way for the introduction by big business of country-by-country reporting of profits and tax, and could be a major breakthrough for tax justice in both the UK and globally.

Stephen Howard, head of Business in the Community, has observed that tax avoidance scandals undermine public trust and that the subject is now the “open sore” of corporate responsibility. Which is another reason to tackle tax avoidance so robustly: it serves to not only protect the UK’s tax base, but creates fairer conditions for those business who actively endeavour to pay the right amount of tax in the right place at the right time.

Paul Monaghan is co-founding director of the Fair Tax Mark.

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