A BLOG BY MARTIN MCEWEN, SSE'S HEAD OF TAX
Last October, SSE became the first FTSE 100 company to be accredited with the Fair Tax Mark. Some have characterised this as ‘brave’ and ‘bold’ but for SSE it was the next logical step in helping people see our commitment to being a responsible taxpayer.
So it has been good to be actively involved in the work being carried out by Fair Tax Mark to help other businesses sign up and provide the public with the reassurance they seek on corporation tax.
Indeed, a survey carried out for us and ICAS recently by YouGov, found that only 34% of people believe that big business in the UK generally pay their fair share of tax compared with 80% for small businesses.
SSE’s starting point on tax is the recognition that, as a provider of an essential service that every member of society depends on, we have a responsibility to contribute to the societies in which we operate.
There is no doubt that there is widespread consumer unease about the way some large companies manage their tax affairs. I believe this is, in part, driven by a sense that companies are not playing fair in the approach they take to managing their tax affairs and are not transparent about the principles that underpin their approach.
SSE has tried to strike the right balance, in providing analysis and commentary as to how the tax charges in our accounts are arrived at, and what factors impact upon them. That detailed analysis, however, only goes part way towards confirming whether the amount of tax payable on our profits seems to be “fair”.
What is more important when making that arguably quite subjective assessment, is understanding SSE’s attitude to tax. That is enshrined in SSE’s tax policy, which cuts to the heart of assessing what kind of a taxpayer SSE actually is, and is why we decided to publish it in full.
We had, however, been looking for the final piece in the jigsaw. We judged that consumers are unlikely to ever be entirely reassured by the claims that companies make themselves.
Indeed our YouGov polling found only 6% would trust a company to provide accurate information on whether they were paying the right amount of tax. Furthermore 43% said they would trust an independent party like Fair Tax Mark, which confirms our thinking that people want an independent third party to provide this reassurance.
That is why SSE sought to work with the Fair Tax Mark. The Fair Tax Mark accreditation has certainly helped us raise our standards and provided the credible third party accreditation we were looking for.
Through the combination of detailed, user friendly analysis; clear statements regarding SSE’s attitude in relation to tax; and then external Fair Tax Mark accreditation, we are confident that anyone can assess how the tax payable on our profits is arrived at and what factors impact upon it.
More importantly, we hope people can be satisfied that our approach to paying tax is fair and, as a result, be confident we are a responsible taxpayer. Hopefully others will follow.