Business owners in Crickhowell business are trying to build a campaigning army of 500 Fair Tax Towns across the UK.

These towns will send a message to the government that unless tax loopholes are closed, their small companies will join big business in turning to tax avoidance schemes to only pay minimal proportions of their profits into the UK economy.

In Crickhowell, traders are being advised by experts and followed by a BBC television crew. Family-run shops have sent their own ‘DIY tax plan’ to HM Revenue & Customs (HMRC), mimicking the offshore arrangements made by some global brands.

If the vision for 500 Fair Tax Towns becomes a reality, they would collectively represent around £1bn of annual tax revenue – the amount of tax avoidance HMRC has advised would be needed for the threat to be taken seriously. Around £20bn a year is thought to be lost from the UK economy in corporate tax avoidance via legal loopholes.

Crickhowell coffee shop owner Steve Lewis is one prominent Fair Tax Town campaigner. He said: “We lose around £1.5m a year in a small town such as Crickhowell because of legal tax avoidance tactics. This money is needed in our community at a time when, for example, we’ve got people out desperately trying to raise cash for vital medical operations for their neighbours.”

The Crickhowell businesses will concurrently run a ‘heroes and villains’ campaign.

Lewis said: “We will be naming and shaming directors at the biggest tax avoidance companies, highlighting their lifestyles and bonuses alongside, for example, the 67-year-old Crickhowell woman raising thousands for children’s operations.”

Businesses in the town that are getting involved include a salmon smokery, coffee shop, book shop, optician and bakery.

So far, 16 towns across the UK have joined the Fair Tax Town initiative.

Photo: Jeff Thomas, owner of an outdoor adventure clothing shop in Crickhowell, which is part of the Fair Tax town initiative. Credit: Fair Tax Town

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A Fair Tax Mark has been created to indicate that a company is making a “genuine effort” to be open and transparent about its tax affairs and pay the right amount of corporation tax at the right time and in the right place.

The mark aims to allow consumers to easily identify which firms are paying the correct amount of tax in order to help them make informed decisions about where they place their money.

Estimates suggest that corporate tax avoidance in the UK is currently around £12bn each year and a poll from the Institute of Business Ethics in 2013 found that corporate tax avoidance was the number one concern of the British public in terms of business conduct.

Last year, a committee of MPs claimed that HM Revenue and Customs had “lost its nerve” in the fight against tax avoidance by multinational corporations following high profile cases, which saw companies such as Google, Starbucks and Amazon implicated.

Margaret Hodge MP, chair of the Public Accounts Committee, supports the Fair Tax Mark. “I think this is a fantastic idea,” she said. “The reaction to the revelations about the tax practices of big names shows that this is an issue the public really cares about and given the choice, many people would prefer to give their custom to a responsible business that pays its fair share of tax.”

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The Phone Co-op, Midcounties Co-operative and Unity Trust Bank were among the first businesses to be accredited by the new initiative.

Richard Wilcox, managing director of Unity Trust Bank, said: “We are delighted to be the first bank in the UK to receive the Fair Tax Mark accreditation. As a socially responsible bank, Unity seeks to be transparent in all that we do and matters of taxation are no different.

“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.”

This article was first published by Blue&Green Tomorrow.

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From April, equity and certain debt investments into social enterprises will qualify for a 30% tax credit.

Unlike businesses and charities, social enterprises, such as The Big Issue or Jamie Oliver’s restaurant Fifteen, have never had their own tax relief scheme. This initiative is the first of its kind in Europe.

“Access to finance has always been the biggest barrier for social enterprises to both start up and grow, and the social investment tax relief has the potential to inject much-needed capital into these organisations,” says Nick Temple from industry body Social Enterprise UK.

Characterised by their combination of philanthropy and profit, social enterprises are on the rise. Government data estimates there are approximately 70,000 of them in the UK, employing almost one million people.

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Fourteen corporations targeted by campaigning organisation 38 Degrees have all now said they won’t be using a tax break open to Olympic sponsors.

The pledges were submitted to 38 Degrees following an online petition created by the organisation, which drew hundreds of thousands of signatures from consumers.

The commitments made by the company means for example, that tax will now be paid on profits made from the sale of food and drinks to spectators in the Olympic Park in east London.

38 Degrees said: “They could see it was safer to back down on the tax break than to risk a PR disaster with the very people who buy their products…This win is more proof that when we work together, we get results.”

However, companies targeted by the petition insisted that they had always intended to waive the tax breaks. In a statement, Coca-Cola said: “Coca-Cola has never intended to, and will not be making, any corporate or income tax exemption claim with respect to any activity concerning our involvement with the London 2012 Olympic and Paralympic Games.”

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