Five facts about the Fair Tax Mark
Susan Cattell, Head of Taxation (England and Wales), outlines five key facts about the Fair Tax Mark accreditation scheme.
The Fair Tax Mark (FTM) was launched in February 2014, following a pilot project. It aims to provide an independent accreditation scheme for companies wishing to demonstrate accountability to stakeholders and shareholders when it comes to tax.
Qualifying for the FTM is intended to show that a company "is open and transparent about its tax affairs and seeks to pay the right amount of corporation tax at the right time and in the right place".
1. Who runs it?
Fair Tax Mark Ltd (a not-for-profit Community Benefit Society) issues the FTM. It is managed on a day to day basis by the Ethical Consumer Research Association (a not-for-profit cooperative) which also works with other ethically-minded organisations and campaign groups such as Amnesty International and the Cooperative Bank. There is a technical advisory group that helps to develop the assessment criteria for the FTM.
2. Who can apply for it?
There are currently two versions of the criteria for obtaining the FTM relevant to different business types:
- Businesses that solely trade in the UK
- UK-owned multinational businesses
Criteria for foreign owned multinationals with UK subsidiaries may be developed in future.
3. What is the application process?
Companies that apply to use the FTM are assessed in a collaborative process with the team at FTM. The assessment looks at the quality of publicly available information and is split into two key areas:
- Tax rate, disclosure and avoidance
Strong emphasis is placed on clear explanations of the company's tax rate as well as the actual effective rate.
4. How much does it cost?
Companies pay a licensing fee, which varies from £250 to £12,000 according to turnover.
Half the fee is paid in advance to cover the cost of assessment and the remainder buys a licence to use the FTM for one year if the company is assessed as meeting the criteria.
5. Who has the Fair Tax Mark?
Ten companies have so far successfully applied for the FTM, including:
- Lush Cosmetics
- Go Ahead Group
- Midcounties Co-operative
- East of England Co-op
- Unity Trust Bank
Fairness and tax
There has been extensive coverage in the media of big business taxation and some companies may consider FTM to be a valuable part of their corporate social responsibility programme.
ICAS has issued six principles which ought to underpin a sustainable tax system. One of the principles calls for simpler, better legislation because it is the law which determines the tax HMRC can collect.
Paying the right tax means that the law has to be right which means clear and unambiguous drafting of parliament's intentions.