TT196: The ‘Fair Tax Mark’

Anyone in business will be aware that tax is a ‘hot topic’ in the media and in particular the concepts of paying the ‘right’ amount of tax and paying a ‘fair share’ of the tax burden of the country.
Recently, an independent not-for-profit organisation has launched what it calls the “Fair Tax Mark”. This Mark can be awarded by the organisation to any company which passes a series of tests regarding the company’s history and attitude to tax.

The tests look at the company’s “transparency” (such as what information is given on the directors and beneficial owners of the company) and what tax has been paid and whether the company has used what the organisation considered to be unacceptable tax avoidance planning.

The “Fair Tax” organisation has promoted the Mark as something which would project a corporate image of openness and trustworthiness to consumers and investors and also protect a company from reputational risk.

Media commentators have suggested that a company could gain valuable positive publicity from adopting the Mark and perhaps obtain a competitive advantage when tendering for work, particularly when tendering for national or local government contracts.

Such comments are of course speculative and it must be remembered that the Mark is not an official government sponsored scheme, although it has received support from some politicians and business organisations.

It must also be noted that the “Fair Tax Mark” organisation is suggesting that companies should not use certain notifiable tax avoidance schemes (known as “DOTAS” schemes) even though using such schemes is legal.

Finally it should be noted that a fee is payable to the organisation to process the application and obtain permission to use the mark on an annual basis. The fee depends on the turnover of a business and as an example the fee for a £1m turnover business would be £1,200 + VAT. If Barnes Roffe LLP were to help in the application then further fees would be chargeable by us but certainly not more than the fee payable to the “Fair Tax” organisation.

Whether it is beneficial for a business to adopt the Mark might be very dependent on the particular circumstances of a company and its trade, customers and attitude towards tax planning.
Further information can be found on the “Fair Tax” website (http://www.fairtaxmark.net) and of course your Barnes Roffe LLP contact would be happy to discuss what this might mean for your business.

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