Introducing the Fair Tax Mark

Demonstrating clear commitment to ESG principles is a priority for many businesses but exactly what might that commitment look like when it comes to a business’s tax behaviour?

Everyone, say hello to the Fair Tax Mark – a visible hallmark of superior tax conduct introduced in the UK in 2014 to inspire and reward commitment to exemplary corporate tax practices.

Who decides which businesses are awarded the Fair Tax Mark?

The Fair Tax Mark is the initiative of the Fair Tax Foundation (the Foundation) – a not for profit social enterprise with an impressive list of board members.

A business bearing the Fair Tax Mark will have been assessed by the Foundation against carefully selected criteria (at that business’s request and cost) and found to be at the forefront of financial and tax transparency and conduct.

The award of the Fair Tax Mark is by no means a ‘one and done’ exercise - a business must be re-examined each year in order to retain accreditation.

Why pursue a Fair Tax Mark?

The Foundation suggests 7 reasons on its website:

• Tax is a hot topic in boardroom.
• For an ESG strategy to be credible, it must explicitly tackle tax conduct.
• Responsible tax conduct resonates really well with customers and employees.
• Stakeholders value independent verification of responsible tax conduct.
• Investors will be assured that the business is managing tax-related risks well (whereas investors are likely to see poor tax conduct as indicative of general poor compliance).
• An accredited business will be well placed to meet (and may already be complying with), incoming legislation on tax and financial transparency.
• Accredited businesses will be part of a growing network of pioneers and enjoy opportunities to collaborate in shaping a fairer and more productive future e.g. at the Fair Tax Week summer event. 

What are the key performance indicators of a Fair Tax Marked business?

The Foundation lists the following in their document here including suggested green and red flag activities for each of 1-5 listed below:

1. Freely available, complete set of annual financial statements
2. Robust, responsible tax conduct commitments, that are subject to annual compliance confirmation
3. Public, country-by country financial disclosures, with narrative to explain unusual positions
4. Disclosure of uncertain tax positions, with narrative to explain significant tax disputes
5. Corporate cash taxes paid, over five-year period

For more information about the Fair Tax Foundation and to find out more about becoming accredited with the Fair Tax Mark, you can visit the Foundation's website: https://fairtaxmark.net 

TLT has extensive experience in advising on tax compliance. If you would like to discuss your requirements, please get in touch.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at November 2024. Specific advice should be sought for specific cases. For more information see our terms & conditions.