A new pressure group, the Fair Tax Campaign, has published a league table ranking the UK's largest retailers according to the transparency and fairness of their tax affairs, with a 'Fair Tax Mark' awarded to those who meet specific criteria.
The Fair Tax Campaign approach assesses each company in three areas: how much information it publishes; whether it pays an 'acceptable rate' of tax on profits and declares a 'fair part' of that profit in the UK; and whether it uses tax havens.
Each category is given a score between 0 and 5, and those companies achieving 12 points or more are awarded the Fair Tax Mark. Only two on the list of 25 retailers are judged to have achieved this status - high street food company Greggs and wine retailers Majestic Wine, while Sainsbury's and W H Smith come bottom.
Fair Tax Campaign's founder is Richard Murphy, a chartered accountant and economist and director of Tax Research. He says the exercise has revealed a wide range of behaviour among UK companies.
'Some tell us a great deal about what they do in the UK as distinct from other countries whilst others are in denial about it. The same is true of tax havens. Many of the companies we surveyed use tax havens and are open about it. Others simply disclose where their subsidiaries are. That's no longer acceptable, Murphy said.
The Fair Tax report shows that nine of the 25 retailers scored 0 for their country-by-country reporting, indicating there was insufficient data on their UK activities to assess whether they paid fair tax. Only three companies scored maximum points on tax haven usage, suggesting that they did not use tax havens. Six companies scored 0 for their tax rate, with campaigners saying this indicated they paid low rates of tax on average over six years it was not possible to tell whether they paid it on appropriate UK profits.
Murphy said that the findings also show that over the six year period used for the survey, the profits of the companies investigated increased by 47%, but the tax they paid increased by 22% and the tax charges in their accounts remained almost constant.
The Fair Tax Campaign says it intends to carry out similar surveys of the tax performance of major companies in other industry sectors, in an attempt to increase public awareness and discussion on corporate tax issues.
