This is from the Fair Tax Mark website this morning:
The Fair Tax Mark is delighted to announce that the Timpson Group (which includes high street businesses Timpson, Johnsons the Cleaners, Snappy Snaps and Max Spielmann), has been accredited with the Fair Tax Mark, demonstrating their commitment to paying the right amount of tax, at the right time and in the right place. The accreditation comes at the opening of the UK's first ever Fair Tax Fortnight, and alongside the release of new research about the public's attitude to tax and good corporate conduct.
The accreditation of Timpson and their 2,046 stores takes the total number of certified Fair Tax Mark outlets and offices to over 6,500, They join a host of other responsible tax businesses, including Richer Sounds, AMT Coffee, The Co-op, SSE and Lush Cosmetics — who all recognise the benefit of being able to demonstrate their commitment to fair tax practices.
I am, of course, a director of the Fair Tax Mark and so I admit my bias, but I am pleased to see Timpson join the Fair Tax Mark. Company by company, it is being appreciated that being seen to pay the right amount of tax in the right place at the right time makes sense.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
[…] a great ally to policy based economic reform. I am delighted he wants companies to sign up to the Fair Tax Mark, just as the Norges Bank now wants multinational corporations to sign up to country-by-country […]
So not fussed by the fact Timpson funnelled a personal political donation to the Tories through his company, to avoid income tax on the receipt?
That is not what the Fair Tax Mark appraises
And companies can legitimately make such payments in the UK
So it doesn’t appraise artificial but legal tax avoidance? Are you sure?
That was not artificial tax avoidance
What loophole was abused? The law was used
That’s it
We don’t randomly rewrite the law
That really is a small-minded, offensive post. Timson’s is one of the few businesses to give ex-offenders employment. There’s plenty on the internet about that and if you look at their own website an unbiased observer might conclude they are also one of the more enlightened employers.
…and they have a statement about their tax policy. How many companies can emulate that?https://www.timpson.co.uk/media/wysiwyg/Timpson/2016_Tax_Strategy_final_7_Sept_17.pdf
It’s now part of the law for companies to have a statement of their tax strategy available for public view
Only some companies
And only relating to the UK
The Fair Tax Mark demands that they go much further
Oonagh McTavish says:
“So not fussed by the fact Timpson funnelled a personal political donation to the Tories through his company, to avoid income tax on the receipt?”
Protection rackets are usually exempt from tax. As is most of the black economy. (Or is that too cynical for you?)
Reuters described it as a loophole https://uk.reuters.com/article/us-britain-election-donations-specialrep-idUKKBN0NJ0U720150519
They are wrong
So you think it is absolutely fine if, instead of donating to a political candidate out of my personal income (taxed at 45%), I get my pet company to donate instead out of its income (taxed at 19%)? Even though the donation is plainly nothing to do with the company?
I am really struggling to see why this isn’t tax avoidance.
I struggle to see why ISAs aren’t tax avoidance but they are not
The answer is – because the law clearly permits this
it’s really that straightforward
We can say the law is wrong but we can’t call it avoidance if the law obviously permits it
Incidentally, the company will not get tax relief on the gift as I recall it (and I have not double-checked, just for the record)
Richard
Your recollection is spot on – political donations are (unsurprisingly) not allowable deductions for Corporation Tax purposes.
Why do it through a company then? I’m confused
Because it is legal?
Because they wanted to?
Because they were making a statement?
I am only guessing
Mike says:
“Why do it through a company then? I’m confused”
Good enough question. I don’t understand that either. Maybe ‘we’ should ask Mr TImpson (?)
It’s possible he’s acting on the advice of some smart-arse advisor who has always done it this way…..?
I think he did what he’s always done – which is donate from the company
I don’t much like it
I don’t share his political sympathies
But company law allows it
And tax relief is denied
Since it is declared that tax consequence will happen correctly
I am bored by discussing a non-issue
“we can’t call it avoidance if the law obviously permits it”
But the law obviously permits patents and IP to be held in tax havens. And loans from group companies in tax havens and captive insurance companies in tax havens.
So why is FTM against these obviously legal things?
We have made clear that if there is an artificial use of a tax haven we will not give a Fair Tax Mark
That, we think, contravenes the spirit of the law
It’s hard to say doing something that UK law clearly permits is contravening the spirit of UK law
So could you give us an example of any large company or any multinational group of companies that has done anything recently that is NOT clearly permitted by UK law?
I think you know you’re being silly
And I can’t be bothered with silly questions
I’m not being silly. I’m trying to find out from you what is and isn’t acceptable to the Fair Tax Mark.
You are defending Timpsons because although you don’t like what they did, it was legal so it’s ok, so they get a FTM.
So what is legal that you don’t like and which actually would stop a company getting a FTM? Anything?
As I have commented to another critic – the issue is abuse of the law
We object to companies not paying the right amount of tax in the right place at the right time by use of artificial structures
Timpson did pay the right tax at the right time on this transaction
And no tax was avoided
You really are making your objections up
‘It’s hard to say doing something that UK law clearly permits is contravening the spirit of UK law’
So a multinational claiming a tax deduction for interest is ok? You’ve condemned Boots for this in the past
So a multinational paying arms length fees to another group company is ok? You’ve condemned Starbucks for this in the past
So an OMB paying a nominal salary and taking the bulk of the profits out as dividends is ok? You’ve described this as abuse and included it in your tax gap calculations in the past
Can companies doing the above get the Fair Tax Mark?
With respect, you know full well that the issues in question-related to offshore and transfer pricing – which involve the exploitation of ambiguities in the laws of multiple countries
And the OMB has been addressed by many times, including the known ambiguity in the law
There is not a hint of ambiguity on the ta treatment of a political donation by a company
There is no avoidance in it
I suggest you take note of what avoidance is
Come come Richard. There is not the slightest ambiguity in the law surrounding an OMB paying dividends. It is perfectly legal.
Even payment of dividends to spouses was challenged by HMRC in the ‘Arctic Systems’ case and found to be perfectly legal.
Yet you choose to call it abuse.
No more or less abusive than channeling donations through companies. Which you call fine and dandy.
But of course, Timpsons paid a big fat fee and I suppose that changed your view on the spirit of the law and what was and wasn’t abuse.
FTM does not see this as a reason not to give a mark
There is agreement
You really are making stuff up
I am making nothing up
Here are your words, in response to why you call paying dividends by OMBs tax abuse and include the numbers in your figure of the tax gsp;
“And the OMB has been addressed by many times, including the known ambiguity in the law”
So what is the “known ambiguity in the law”? I say there is none, you say there is. So what is it?
“There is not a hint of ambiguity on the ta treatment of a political donation by a company”
Yes there is if it is to the MDs son. Why isn’t it a taxable BIK on John Timpson? Many argue it should be. There is your ambiguity.
But Timpsons pay a fee and you look no deeper.
With respect, we look at the tax disclosure and the likelihood there was abuse
Was there disclosure? Yes
Was it legal? Unambiguously so
If there was a BIK issue would we ever know? No: that’s not in the public domain and not a CT issue
So you are losing on absolutely every point
But that’s because our approach is clear and unambiguous
Politely, I think you have wasted ample of my time now