Pay Fair Tax

The GBC requires businesses to commit to paying their taxes, not engage in tax avoidance and commit to be transparent in their relationship with HMRC.  Where you offer tax advice to clients, we would also expect these same principles to be promoted.

Why it matters

We believe that all corporations and individuals have to do their bit to make sure that the services we need and enjoy are paid for by all under a fair system.  Businesses benefit from a workforce educated in schools and cared for by the health service as well as from well-maintained roads and many other parts of the state’s infrastructure that enable companies to do business.

Public Attitude

Data from the Department for Business, Energy & Industrial Strategy found that only 6% of the public asked greatly trusted large businesses to be open and honest about how much tax they pay. For the full report, see their website here.

Mini Umbrella Companies

MUC’s (Mini Umbrella Companies) operate by splitting up temporary employment workers into hundreds or even thousands of small, limited companies set up with the sole purpose of carrying out tax avoidance. Temporary workers do not typically know they are using a MUC while being frequently moved between MUCs to help maximise profits from the fraud.

Mini Umbrella Companies commit fraud by reducing PAYE, National Insurance, and VAT paid to HMRC when paying temporary workers. It is important that GBC members are aware of the risk they pose and do their due diligence to ensure there are none in their supply chain.  For more information see HMRC guidance here. 

Smaller organisations

For companies with up to 50 employees we have developed a streamlined version of the accreditation in collaboration with Federation of Small Businesses.  Please find more information about this and the questions you will be asked here: https://www.goodbusinesscharter.com/streamlined-version-FSB/

Self-certification for organisations with over 50 employees

The GBC requires businesses to adhere to responsible tax management practices. We define tax avoidance as a deliberate attempt to get out of an obligation to pay tax by entering into a set of artificial arrangements which have little or no commercial purpose other than the reduction of a tax bill.

For the avoidance of doubt, this does not include the use of tax reliefs or allowances that governments make available to companies, as long as the relief is claimed in a way which aligns with government policy intention.

We will ask the following questions:

1. Do you commit to pay your taxes where applicable and not engage in tax avoidance, as defined above, and to publish your tax policy in the public domain?
2. Do you provide information on your website or in your company accounts about your company’s approach to paying corporation tax or do you commit to this going forwards?
3. Do you commit to be transparent in your relationship with HMRC, providing all relevant information to them and to cooperate in resolving any disputes?    

If you are a company that offers tax advice as part of your business operations, we may also request a copy of your policy relevant to these tax services to ensure that these services also comply with our tax requirements.

For smaller companies, the tax policy referred to in question two could be as simple a statement as saying: ‘We pay full corporation tax calculated on our profits each year’.

With thanks to the Fair Tax Mark, TaxWatch UK and the CBI‘s seven tax principles for influencing our work.

Concerns

If you are concerned that you will not be able to answer these questions but believe that your organisational practices follow the spirit of this component, please consult with us so that we can make a judgement on whether we believe you meet the requirements of the component.  We are really keen to have organisations of all sizes and from all types of industries and sectors joining the Good Business Charter.  These are standard questions and for some organisations there may be questions that are just not relevant or too onerous.  We want to hear from you if you feel that is the case and we will take a sympathetic view.