As the Fair Tax Mark noted yesterday:
We are immensely proud to announce that the Co-operative Group is the latest recipient of a Fair Tax Mark.
I can be included in the 'we' as I am technical director of the Fair Tax Mark.
As we also noted:
The Co-operative Group champions a better way of doing business for members and communities. With tax remaining the number one ethical issue with consumers, we are delighted that the Group has made a public commitment to be honest and open about tax by becoming Fair Tax Mark accredited. The full details of their new tax policy can be seen here.
The Co-operative Group is one of the world's largest consumer co-operatives and has interests across food, funerals, insurance, electrical and legal services. The Co-operative Group operates a total of 3,750 outlets, with more than 70,000 employees and an annual turnover of approximately £10 billion.
The Co-op has been a pioneer for a lot longer than most businesses. It is good to have them on board.
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Out of interest, have the Guardian Media Group and Stemcor applied for the Fair Tax Mark?
We do not discuss FTM applicants
Would it not be good to say which companies applied but failed to get the FTM ? It would provide openness and transparency.
We contractually agree with applicants tgat we will not do that
The FTM us a positive and not a negative process
So their Cayman subsidiary, Violet S Propco, is nothing to do with using a tax haven for tax avoidance then?
The issue was addressed during our assessment and marking as appropriate was made
What was their explanation?
Why did FTM find this response to be acceptable?
I assume they are happy for this to be shared in public.
We have granted an FTM
We publish our criteria
They passed them
Not a very transparent reply, sorry.
If you want to keep the FTM as a private thing between you and them, that’s fine.
You’ve suggested you want this as a requirement for public procurements. The FTM would need to do a fair bit better on transparency issues.
That may be your opinion
At this stage it is not ours
I have given reasons and I think them valid
You are, of ciyrse, entitled to disagree
Transparency always looks different from the inside than it does from the outside.
That probably accounts for the difference in our opinions – I am an outsider.
Richard
One of your continued claims is that the number of companies registered at Companies House which don’t file tax returns with HMRC is practically proof of wide spread tax evasion.
Others have said your claim is nonsense, without foundation and ignores the fact that many groups have dormant companies for many reasons.
I note that in their list of subsidiaries the co-operative group has no less than 166 companies listed as dormant, none of which will be filing returns with HMRC. Is this proof that the co-op must be engaged in tax evasion? Or are your claims nonsense?
No it is not
The primary concern is with 400,000 plus companies not filing accounts each year as part of the larger total
I have never disputed the fact that dormant companies are retained and that doing so is not a tax risk
You are creating a straw man argument
So, in your view, it’s ok for the Coop to have dormant companies, but none of those 400 thousand companies could be dormant in the same way? Or simply not old enough to have to file accounts (I understand it is almost 2 years before a new company has to file it’s first accounts with companies house)?
Ans also it seems that it is ok for the Coop to have subsidiaries in the Caymans but not other companies, who you are happy to attack for it.
Sounds to me like the Fair Tax Mark is just a piece of paper for those people you want to give it to. So basically worthless, unless virtue signalling is your game.
Not at all
You are, I presume deliberately, misconstruing the dormant company issue that I have already explained
And if you read the FTM criteria it is possible to have a tax haven subsidiary but companies are marked down for it
So, with respect, you are making up misrepresentations
Well, I just checked the companies house data:
https://www.gov.uk/government/organisations/companies-house/about/statistics
It seems there are 3,610,038 companies on the register of which 3,341,899 are active. So there are only 268,139 dormant companies in the UK. Not sure where you get you 400 thousand number from.
98.9% of companies are up to date in filing accounts. So if you take that 1.1% who haven’t (and dormant companies don’t have to file, so it is 1.1% of the active companies, or 36,761) and even if you add in the number of dormant companies you don’t get anywhere near the “400,000 plus” companies you are talking about.
So it doesn’t seem that what you are saying makes much sense, other than you don’t like it and say that dormant companies “might” be used to nefarious purposes.
You also assume that any company which operates in a tax haven is automatically doing something it shouldn’t – you say yourself you mark them down for it – but there are plenty of legitimate reasons for using tax havens.
It seems to me that the FTM isn’t exactly open and transparent, not least because you don’t publish the scoring for any company, so it could easily be open for abuse. Clearly many companies also share this skepticism – that this could easily be a biased test administered by tax justice campaigners (who are very likely to be less than objective) and so are unwilling to subject themselves to this test, as any failure would lead to the same campaigners attacking them in the press.
I’m not surprised only a handful of companies have signed up to it since it has been running.
You clearly have no clue as to what a formant company is
In which case I will treat this comment as time wasting
I have dleat with all the issues you note and why the Companies House stats are false in published work
“The primary concern is with 400,000 plus companies not filing accounts”
Well you accept that the 166 Co-op dormant companies pose no risk, despite not filing accounts and you have not given one single example of a company claiming to be dormant whilst being used to evade tax. Not a single one.
Which means the score at the moment is 166-0 against your claims.
Go and read what I have written and stop wasting my time
I acknowledge there may be 1 million legitimate dormant companies
That was you last comment
I’m pretty sure what a dormant company is – companies house publish what makes a company dormant on their website.
They also say clearly how many companies are total, and how many are active. Which means the remainder must be dormant. I find it pretty hard to see how there can be some other number which companies house aren’t including.
You are claiming companies house are falsifying their statistics. That is a pretty big claim to make. Your typing and general demeanour suggests you are getting quite worked up. Which probably means I have hit a sore spot. FTM not doing very well, is it?
My typing suggests I do not have time to waste
And yes, I am saying Companies House falsify records: they may sur me if they wish but to be candid their claims are 100% fabrication. Call them lies if you wish.
And you clearly do not know what a dormant company is
And for the record, FTM is doing better than any of us expected, by some way
Why would companies house falsify records? Do you have any hard evidence for this other than simply making accusations?
Read my work on the subject
16 Companies since the inception of the FTM is hardly taking the tax world by storm. Your prospectus mentions a target of 350 companies signed up by the end of Year 3. You’d better get a shift on.
It too Fair Trade three years to approve anyone
But if you are now saying your current level of FTM companies is above the level you expected when you set the FTM up, wouldn’t that mean you deliberately gave false information in the prospectus to potential investor members in order to attract them?
I am sure there is a rational explanation to this. Perhaps you could explain?
Our prospectus related to our basis of forecasting at the time issued
I would acknowledge we have dad fewer small companies but more large companies sign up than we expected
Overall we are happy with progress
No one is in the slightest bit being misled
How much did the co-op pay for this privilege. I should think a few hundred thousand pounds would make it a great deal for them.
We do not disclose individual amounts but the range of fees we charge is published on our website as an indication to potential applicants
£4000-£12000! Is that all ? You could have done them for much more.
You are entitled to your judgement
A link to a list fair tax mark approved enterprises would be useful to all who want to direct their spending or investment in supportive way.
It’s in the site
Its good to see the Coop working its way to rehabilitation and congratulations to you, Richard, for helping in this process.
This great popular movement deserves teh chance to show it has its house in order so let 1000 Flowers blloom.
A propos of your blog on the desperate need for some real middle ground politics, it seems that the Behavioural Insights Team team may have been directed to come out in force and “nudge” you into line. Really pretty stupid for such a grandly named team not to have realised that, of all people, you are not susceptible to nudging.
Quite how you managed to keep your cool in the face of such a mountain of crap I really don’t know.
I was trained in combat with Andrew Neil, a master in the purveyance of similar nonsense
Am reading this in the states: you’re beginning to create a buzz here. Not quite the Beatles yet, but many of us take a keen interest in tax evasion, money laundering and so forth and your insights are valuable. Keep your passport up to date!
Anyway, I can see from this thread that you have your work cut out. I also see your great patience with “hostiles”, and the care, detail and precision you put into your answers. I guess the payback for you is imagining their crestfallen faces when their faux enquiries are met with such blunt clarity. “Your time here is running out” could be a t-shirt!
Some additional thoughts for these deranged individuals, not that you need help from me:
– Nice try with the Coop subsidiary in the Caymans. But as Mr Murphy has explained, they got the FTM anyway, so this cannot be used for tax avoidance. Very simple.
– The number of dormant companies is disputed. Well, let’s see. Companies House have not disputed Mr Murphy’s figures. Clearly they would if they had a case.
– Another nice try with the number of companies being awarded the FTM. Let’s see again. Mr Murphy has insisted that there is a culture of tax avoidance in the UK. A low number of companies qualify for the FTM. Can the head-bangers see a connection here??
The secret is to bang the rocks together guys! And maybe question your neo-liberalism from time to time.
“Go and read what I have written and stop wasting my time”: eat that 1%ers!!
“— Nice try with the Coop subsidiary in the Caymans. But as Mr Murphy has explained, they got the FTM anyway, so this cannot be used for tax avoidance. Very simple.”
I’m guessing the FTM just gives you negative points for having a subsidiary in a tax haven. The FTM criteria seem to just suggest the FTM is a tick box checkup. I highly doubt it does an investigation into the purpose, business or accounts of any subsidiaries.
“— The number of dormant companies is disputed. Well, let’s see. Companies House have not disputed Mr Murphy’s figures. Clearly they would if they had a case.”
Or it simply doesn’t think Murphy is important enough to engage with, and as we have seen with his Tax Gap estimate and HMRC’s reply, whatever Murphy is told he will still peddle his own line – that he is always right. So why engage anyway?
“— Another nice try with the number of companies being awarded the FTM. Let’s see again. Mr Murphy has insisted that there is a culture of tax avoidance in the UK. A low number of companies qualify for the FTM. Can the head-bangers see a connection here??”
Or it just could be that most companies don’t see any value in the FTM, not least because it is not wholly transparent and the guy in charge of it is well known for attacking various companies with claims of tax avoidance.
Given the nature and tone of your comments – all based on prejudice and on an absence of actual argument – I cannot be. Bothered to respond to it
Try engaging or please don’t bother to try again
“I’m guessing the FTM just gives you negative points for having a subsidiary in a tax haven.”
This is correct. Richard and I discussed this at length when the second FTM was launched, and I suggested that maybe the criteria should be amended to exclude companies which are clearly avoiding tax, but he confirmed that there are no automatic fails. You can be as blatant a tax avoider as you like, so long as you explain clearly that you are doing so – the point of the Fair Tax Mark is clarity, not fairness.
That is not the case
There is a ‘true and fair over-ride’ to the criteria
And we use it when appropriate
Sorry, I forgot that you’d added an over-ride after I pointed out that the criteria didn’t really work on their own.
I note that the over-ride as written only disapplies the mark if it would otherwise be awarded to someone inappropriate. Can you confirm that it can’t be applied the other way – that you couldn’t use it to give the mark to a company that strictly fails but that you think ought to pass?
After?
Please don’t make false claims
It’s always been there
And it never gives an award when someone does not qualify
“It’s always been there”
Really?
I don’t have access to old drafts of the criteria, but if you look back at your discussions on this very blog in February 2014, we had a discussion in which you accepted that the criteria as then written did not stop an egregious tax-avoider getting the mark. You then said the criteria would be amended accordingly.
If the over-ride had been there at the time, would you not have simply pointed it out to me?
Thank you for confirming that the Co-op Group didn’t need the over-ride in order to pass.
I think you will find that aspect was always there
“I think you will find that aspect was always there”
If you say so, then of course I take your word for it.
I do however find it extremely odd that neither of us referred to it, when it would so clearly have settled the discussion straight away.
Maybe I am wrong
I can’t be bothered to research the point
It is there now
And let’s be honest, we haven’t been going for long
“I can’t be bothered to research the point”
I can 🙂
Especially when it’s as simple as it turns out to be.
The original discussion we had in February was about the criteria that apply to companies with business solely in the UK. Those criteria did not include any sort of over-ride – I know this, as they still do not.
You later (in June) released criteria for UK companies with overseas interests. The document setting them out provides for an over-ride.
Unless you have an unpublished revision of the UK-only criteria, it looks as though it is still perfectly possible to get the Fair Tax Mark despite being an egregious tax avoider, so long as you only operate in the UK.
I rather assume you do have a revised set of criteria – after all, it’s been 18 months – but you don’t seem to have them up on the website.
The UK risk is very much lower
In practice we would apply the over-ride if we felt it appropriate
And have
OK, so the criteria have been updated, it’s just that the update hasn’t been published.
Thanks for clarifying, that’s useful to know.
That is not what I said
Yes it is – you just said you’d apply an over-ride to a UK-only company even though it’s not in the published criteria.
That can only mean either that this is a new criterion that hasn’t been published, or that it’s not an official criterion at all.
Denying the mark to a company on some basis not in the official criteria would make it pointless having objective criteria in the first place. I naturally assumed you’re not doing that. Are you saying that I’m wrong, and that you apply a subjective test without having made people aware of the fact?
It is clear we have a true and fair over-ride
No one is in the slightest being misled
It’s clear if you read the criteria for multinationals, but there seems to be little reason to do so if you’re a UK-only company.
It seems odd to say “no-one is being misled” when I was – and I think I have taken more interest in how the FTM works than most people.
I would have thought that as the Fair Tax mark is principally concerned with clarity and full disclosure, you would be keen to avoid any doubt. You would not say that a tax disclosure is clear if it is omitted from the accounts but included in another document without any cross-reference to direct the reader to that document, for example.
But how you run your organisation up to you 🙂
I have noted your concern 🙂
Thank you. After all, I’m only pointing this stuff out because I think that having a flawed Fair Tax Mark is worse than not having one at all, so if I can help you out then that’s all to the good 🙂
“Or it simply doesn’t think Murphy is important enough to engage with”
Yes, that’ll be it. A public intellectual of global significance, the author of Corbynomics, the driving force behind new global account standards (CBC).
I would expect to see Mr Murphy’s ideas to become increasingly central to the US Presidential campaign. You’ll remember what happened in the Labour Leadership election I’m sure.
Richard,
Given the cluster of comments, you are clearly on target.
Terrific Steve Bell cartoon today about political bullying. In fact bullying politicians & their helpers have received quite a lot of media coverage very recently.
The gave should have been have
Apologies