There's a simple solution for making big companies like Google pay more than Osborne's mates' rates of tax

Only a third of us believe that most big businesses in the UK pay their fair share of tax. We're not keen on being taken for a ride either: just 6 per cent of us trust companies to provide accurate information on tax paid

Ben West
Thursday 04 February 2016 07:47 EST
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George Osborne
George Osborne (Getty)

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In the same week that Google became the World's most valuable company, news emerged of the deal it had carved out with HMRC, under which it 'agreed' to pay just £130m in tax.

You and I hand over 20 per cent or even 40 per cent of our income to keep our schools and hospitals in good working order, our roads fit to drive on. Mates' rates at George Osborne's Treasury? An effective tax rate of just 3 per cent.

But it's not just Google. Overall, the so-called 'tax gap' costs us £120bn per year (the IFS disputes this figure, and says the actual tax gap is £34bn in a report). That's enough to fund the NHS for the whole of England.

And with the NHS creaking and public finances at breaking point, the British public have had enough. Only a third of us believe that most big businesses in the UK pay their fair share of tax. We're not keen on being taken for a ride either: just 6 per cent of us trust companies to provide accurate information on tax paid.

At a time when public trust in business is plummeting, tax justice has been called 'the Fairtrade of our times' - a measure by which we tell a good business from the bad. And as with Fairtrade, when co-ops were the first to stock the products, co-operative councillors the first to demand fairtrade procurement, and Labour & Co-operative MPs the first to demand political support, it's the co-operative movement and social enterprises that have once again been ahead of the curve.

With so many of us outraged by the Google revelations, yesterday Labour called a debate in parliament to demand answers. Shadow Chancellor John McDonnell savaged Chief Secretary to the Treasury David Gauke for what he called a “bizarre, upside down and callous sense of justice and fairness”.

So how do we fight back against it?

One solution is the Fair Tax Mark. Launched in February 2014, it’s designed to enable those of us unacquainted with the complexities of corporate balance sheets and Annual Reports to easily tell the tax dodgers from those who pay their fair share, and to change our consumer habits accordingly.

In order to achieve the Mark, companies have to open their books to a team of experts. It's up to applicants to prove that they are making a genuine effort to be open and transparent about their tax affairs, and that they are paying the right amount of corporation tax at the right time and in the right place.

Some of Britain's largest co-operatives have led the way, with Midcounties Co-op, Phone Co-op, Unity Trust Bank and the Co-operative Group the first to achieve the Mark. They've since been joined by transport operator Go Ahead Group, energy company SSE, and high street cosmetics chain Lush, with others scrambling to sign-up.

And the rigorous process pays off. Amidst public anger, consumers are increasingly tough on those who make excuses when it’s their turn to buy the round. Certainly, companies like Co-operative Energy have seen new customers join due to the Mark, and plenty of us have stopped doing business with those who flake out. As Anna Turley put it in yesterday’s debate, it’s high time companies wore fair tax as a “badge of pride” rather than seeing it as an unnecessary burden.

So enough of multinationals treating the British state as if it were a charitable fund to which they can voluntarily contribute. They employ staff educated in state funded schools and treated in NHS hospitals. Their vans drive on taxpayer-funded roads, and they frequently avail themselves of a legal system paid for by you and I.

George Osborne once asked us to distinguish between the ‘skivers’ and the ‘strivers’. And through the Fair Tax Mark, that’s exactly what we’ll do. So, George, maybe it’s time to encourage those big business owners to sign up?

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