Tax campaigners are offering small businesses free advice to help them qualify for the Fair Tax Mark (FTM), the accreditation scheme re-launched earlier this year to a mixed reception from tax professionals.
The group behind the scheme has declared that “many small businesses are currently struggling with the financial pressure of unfair competition from corporate tax avoiders”, and is offering the service to small businesses that can “demonstrate why companies paying a fair share of tax is important to them”.
The service normally costs “upwards of £200”, according to the FTM website. Free assessments and advice will be offered to 25 small businesses in five categories – bookshops, record stores, coffee shops, co-ops and others.
Five companies have received the FTM awarded since the re-launch in February. The Phone Co-op, Midcounties Co-operative and Unity Trust Bank were named as ”pioneer” companies. Go-Ahead, the transport group, was the first FTSE 350 company to be awarded the mark, and last month energy provider SSE became the first FTSE 100 company to be accredited.
The awards have received little coverage in mainstream media. Some tax professionals have suggested that the initiative may have merit as a benchmark for tax transparency, but its opponents argue that “fairness” in relation to complex corporation tax issues is too subjective to be judged by a group of tax campaigners.
Stephen Herring, head of taxation at the Institute of Directors, told AccountingWEB: “I would be gobsmacked if many customers, or indeed suppliers, were to look at the score a business receives in the so-called ‘Fair Tax Mark’ test.
“If asked, I would urge small businesses not to waste their time and effort on this flawed, politically motivated initiative which, thankfully, has not obtained traction beyond a tiny number of businesses even if the usual suspects are included.”
Herring suggested that paying £200 to obtain the mark would be “poor value”, adding that “I would recommend businesses with a little surplus cash to identify a suitable charity to which to donate their money”.
However, there are signs that some of the recipients intend to highlight their accreditation in marketing campaigns. SSE has placed two full-page advertisements in The Economist this month, saying it was committed to “making a difference”.
One advertisement said: “That’s why we’re proud to have been accredited with the Fair Tax Mark, which means customers can now be assured that SSE is paying its fair share and being open about how it does that.”
This week the FTM team has addressed tweets to bookshops, Fair Trade retailers, trade associations and the organisers of the forthcoming Small Business Saturday, inviting them to “get a free Fair Tax Mark and show customers you care about tax”.
PIRC, the investor advisory group, noted last week that “public attention on the role institutional investors have in supporting taxation governance reform is increasing”.
It added: “In the UK, FTSE 100 company SSE Energy is now an example of international best practice with its announcement of significant change to its reporting and accounting to shareholders, including disclosure of all its tax liabilities and country by country reporting of revenue and tax paid as part of the growing Fair Tax Mark movement.”