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Company gains fair tax mark for non-avoidance pledge

21 / 10 / 2014
Company gains fair tax mark for non-avoidance...SSE has become the first company listed on the FTSE 100 to be awarded the Fair Tax Mark, a designation that shows it steers clear of any efforts to avoid corporation tax.

The energy company has published accounts from the past as well as pledging to avoid taking part in tax avoidance schemes or squirrelling funds away in tax havens.

In addition to this, it has compiled a country-by-country guide to its financial affairs, in line with new guidelines devised by the Organisation for Economic Co-operation and Development.

The significance of this is that some multinational firms, such as Google and Starbucks, have managed to avoid tax by moving money from one country to another to enable it to declare that it is not making a profit in certain jurisdictions, thus avoiding any tax liabilities there.

SSE only operates in the UK and Republic of Ireland at present, but the latter country has been notably used by Google as a base for subsidiary firms through which money has passed, enabling it to shift cash away from the taxman's net in countries outside the US, a tactic known as the "double Irish" loophole.

While the Irish government is expected to announce the phasing out of that loophole in this week's Budget, it is anticipated the measure will be phased in over four years, meaning any pledge by SSE not to play fast and loose with tax via the Republic's system will be a notable one.

Of course, while the SSE pledges are good news for the treasury and UK taxpayers - who, after all, make up the bulk of the company's customers - the firm itself will hope to gain some considerable commercial benefits by boosting its reputation in an industry that has been beset by mis-selling scandals, public anger at service standards and general dismay at soaring domestic fuel prices.

The firm has noted its award of the mark on its website, in addition to stating that it has paid £1 billion in UK taxes since 2011.

It stated: "We're proud to have been accredited with the Fair Tax Mark, which means customers can now be assured that SSE is paying its fair share of tax and being open about how it does that."

This boast was listed alongside the fact it now pays all staff the 'living wage' or higher, as well as employing 19,000 people in Britain and investing £80 million in training. 

All this comes at a time when the firm's 'green' credentials are being flagged up so much it even has an image of an orangutan - one of the world's most endangered primates - on its posters. Clearly it helps not to be trying to make a monkey out of the taxman.

SSE may have set the mood music for others to follow, according to director of the Fair Tax Mark Richard Murphy.

He remarked: "As was the case with Fairtrade and other successful ethical standards, we anticipate that the accreditation of a major FTSE 100 company will prove to be a game-changer for the reporting of responsible tax planning in the UK."

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