If 2012 was the year that the world woke up to the inequities of corporate tax avoidance, with the barefaced tax aggression of Starbucks, Amazon, Microsoft and others forcing the issue on to the front pages. And 2013 was the year that Governments started to respond (albeit meekly), with the UK‘s pledge to close the tax gap and the G8 nations accepting the need to clamp down on tax avoiders at their summit in June. Then 2014 will hopefully be the year that consumers became empowered to take action with their wallets – punishing the abusers and rewarding the payers.

The campaign for a more responsible approach to tax took a decisive step forward in February when Midcounties Co-operative, Unity Trust Bank and The Phone Co-op became the first businesses to be accredited by the new Fair Tax Mark, the world’s first independent accreditation scheme to address the issue of responsible tax. As Ben Reid, Chief Executive of Midcounties Co-operative, points out: “Last year we contributed the equivalent of 15% of our profits to charitable causes and it makes no sense for us to undermine this by engaging in aggressive tax avoidance schemes even when to do so would be legal.” In a similar vein, Richard Wilcox, Managing Director of Unity Trust Bank adds: “Established as a bank to promote the common good, we believe a fair tax system is vital for society to thrive. Businesses have a duty to pay a fair share and to invest in the UK economy and society as a whole.”

The Mark certifies that a company is making a genuine effort to be open and transparent about its tax affairs and pays the right amount of corporation tax at the right time and in the right place. It has been developed by a team of tax justice campaigners (including tax guru Richard Murphy), a seven strong panel of tax experts and specialists in corporate responsibility (CSR) and ethical consumerism.

The benefits of tax avoidance being reduced are immense. Current estimates suggest that corporate tax avoidance in the UK is currently running at £12 billion every year, a sum which would fund the training of almost half a million midwives and pay the salaries of half a million teachers for a year. In the developing world the situation is worse still: three times more is lost to tax havens than is received in aid. Oxfam have estimated that the lost tax revenue is enough to eliminate extreme poverty across the globe twice over.

The less corporations pay their taxes, the more Government will tend to either cut back on essential spending or shift more of the burden on to labour (via direct and indirect taxes). This really is unjust given corporations benefit enormously from the healthy and educated workforce provided for by taxation in the UK.

The Mark has secured the backing of some political heavy-hitters. Margaret Hodge MP, Chair of the House of Commons Public Accounts Committee has commented: “I think this is a fantastic idea…. seeing customers vote with their feet is perhaps the most effective deterrent there is to companies engaging in tax avoidance or other irresponsible practices.” Caroline Lucas MP has tabled a cross-party Early Day Motion welcoming the Mark: “This is great news for consumers, for transparency, and for the principle that everyone should contribute their fair share.” In a significant development, the professional association of chartered accountants, the ICAEW, has come out strongly in favour of the Mark.

Recent polling from the Institute for Business Ethics has found that tax avoidance is now the number one concern of the public when it comes to business conduct. The Fair Tax Mark offers those in the business community who are responsible tax payers the opportunity to differentiate themselves from the avoiders and evaders, and lead the next big development in corporate responsibility.

For further details please visit www.fairtaxmark.net.

Paul Monaghan, Director of Up the Ethics (and Corporate Responsibility Specialist at Fair Tax Mark).

This is a guest blog and the views of the author are not necessarily those of The Equality Trust.