Several FTSE 100 companies have set out to meet the standard
and some have even made structural changes to get the
certificate. The first FTSE 100 business to receive the Fair
Tax Mark was the Perth-based power company SSE.
"The Fair Tax Mark is about sending a signal about the kind
of economy and society we want to be in," said Gregor
Alexander, finance director at SSE. "We want to see inclusive
economic growth in every part of the British Isles."
SSE is one of the 'big six’ energy suppliers in
the UK. The company has also made a point of paying the living
wage (as defined by the Living Wage Foundation, not the minimum
wage, which the UK government renamed the 'national living
wage’ in 2016) across its UK operations.
"It’s a positive movement seeking to create a
culture of pride in tax," Alexander said. "That’s
something SSE wants to be a part of."
Much like Fairtrade and organic food, the Fair Tax Mark is
hoping to establish an international standard synonymous with
corporate responsibility. Businesses like ethical cosmetics
company Lush are signing up in the hope of standing out from
the crowd to consumers looking to make better decisions in the
One company that signed up to the standard overhauled its
tax structures in a bid to clear its record before filing its
first country-by-country (CbC) report. The cost of
restructuring may be high in some cases, but the impact of a
scandal could cost a company its reputation.
"You have to take care of your reputation," a financial
officer at a UK window company told ITR. "It may be
legally above board to pay a certain [tax] rate, but
what’s fair is another matter. It’s
not just about what’s legal and what it costs at
the end of the day."
"We want to demonstrate our corporate social
responsibility," the financial officer said. "I
don’t want my company to just pay the lowest tax
rate possible, but how do you communicate that to shareholders?
It’s a difficult balance to strike sometimes."
The meaning of tax 'fairness’
Companies signing up to the mark have to confirm their tax
compliance every year. This means reporting of income, profits
and taxes on a country-by-country basis, as well as policy
commitments to shun aggressive tax planning and the use of tax
Paul Monaghan, chief executive of Fair Tax Mark, co-founded
the organisation in 2013. "We have now certified more than
fifty businesses, with more than half of those in the last
eighteen months, and we will be announcing new FTSE-listed
accreditations in the summer," he told ITR.
"We are also seeing increasing demand from businesses
headquartered outside of the UK and we will soon begin work on
developing international standards to accommodate this," he
Before Fair Tax Mark, Monaghan oversaw ethics and
sustainable development at the Co-operative Group for the best
part of 20 years, including more than a decade at the
Co-operative Banking Group.
"The Fair Tax Mark means enhanced tax transparency, such as
detailed numerical reconciliations of both total and current
tax and deviations from expected headline rates of tax,"
Ever since the corporate world was shaken to its core by tax
avoidance scandals, the public has grown far more critical of
tax planning. Think tanks and NGOs have played a key role in
shaping the debate on tax reform.
"Our research found that there is a huge trust issue with
big business," said Susan Davy, CFO at Pennon Group.
"Businesses not only need to pay their 'fair
share’ of tax, but they have to demonstrate that
they are doing so."
"That’s why this initiative is so important,"
she added. "It’s about transparency.
It’s about indicating to our customers what we are
Pennon Group is one of the biggest recycling companies in
the UK and has assets worth more than £6 billion ($7.5
billion). The FTSE 250 company was the first water and waste
management business to sign up to the Fair Tax Mark.
"Eighty to ninety per cent of the public thinks that tax
avoidance, even when it’s perfectly legal, is
morally questionable," said Robert Palmer, director of Tax
Justice UK. "Paying tax is one of the most basic ways companies
can contribute to our society."
Palmer called for a "new deal" in tax policy. "This new deal
involves tackling tax avoidance and evasion, closing loopholes
and tax giveaways to the wealthy, and making the positive case
of what a fairer, simpler tax system should look like," he
"Tax is absolutely fundamental to who we are as a society
and a country," Palmer said. "We need to get it right and
we’re not doing a good enough job at the
Many tax professionals would worry about the level of
subjectivity involved in attempts to forge an ethical tax
brand. The difficulty for policymakers has been to define tax
'fairness’ since it can’t be simply
reduced to legalistic questions.
What is legal is not automatically 'fair’, even
if what is clearly illegal is 'unfair’. Tax policy
has long been about legal and accounting principles, rather
than answering philosophical questions. Yet the Fair Tax
campaign relies on companies to do just that.
The BEPS project may have rewritten the rules of tax, but
the Fair Tax Mark aims to shape corporate behaviour within
those rules. The next step will be to take the Fair Tax Mark
international in the latter half of 2020.