CBI Urges Businesses To Be Open About Tax Affairs

The Confederation of British Industry (CBI) has said that businesses must take further steps to demonstrate to the public that their tax affairs are legal and that they are responsible taxpayers.

According to a new CBI survey, nearly a quarter of customers (23 percent) have actively avoided a company within the last year because of concerns about its tax affairs. The survey also found that, on average, the public thought there was a 31 percent gap in what HM Revenue and Customs (HMRC) expects to collect in corporation tax and what is actually paid. This “tax gap” was in fact nine percent (GBP3.9bn (USD6bn)) in 2012-13.

Nearly half of those surveyed agreed that requiring businesses to clearly explain the amount of tax they pay would increase public trust. 64 percent of respondents said that the business community does not care whether the public think firms pay their fair share of tax, and 71 percent felt that the Government is not doing enough to prevent corporate tax avoidance.

John Cridland, CBI Director-General, said: “Business has a great story to tell. I travel up and down the country speaking to businesses – small, medium and large, family-owned and start-ups. It’s clear that without their GBP175bn tax contribution [in 2014] we simply wouldn’t be able to afford the services we all rely on – from the schools that educate our children, to the NHS that looks after us when we need it.”

“But the misconception that businesses don’t pay the right amount of tax will continue unless they can clearly show how they are behaving as responsible taxpayers. Firms understand that tax has a big impact on how customers view their product or service. They have made some progress over the last few years in addressing this, but with nearly a quarter of people boycotting firms over their tax arrangements, they need to do even more.”

“By being upfront about tax, British business can remain strong and competitive, so everyone benefits from its value. The CBI is calling for firms to clearly set out their tax affairs on their website and is backing the OECD updating of international tax rules, so they are fit for a globalized world and create a level playing field for businesses to invest, grow, and compete.”