How can business and civil society work together
to design and encourage a responsible tax system?
The Responsible Tax Lab
How can business and civil society can work together
to design and encourage a responsible tax system?
The Responsible Tax Lab

The Responsible Tax Lab is an exciting and ambitious programme focusing on how businesses and civil society can work together to design and encourage a responsible tax system. Through the Lab we will convene people and organisations who want to be proactive and aspirational in developing and providing the practical ideas, tools and resources that would make our future tax system fit-for-purpose.

Objectives

The work of the Responsible Tax Lab is underpinned by Common Vision’s three core values.

Analysing the issues

We bring together working groups to develop practical ideas and recommendations to taxpayers, government and tax authorities.

Encouraging understanding

We seek to provide a balance between the complexity of some issues with discussion that is engaging and accessible.

Building bridges

We value different perspectives and experiences and seek to build relationships between people who may not always agree.

Introducing the Responsible Tax Lab

"Common Vision are carving out a reputation in an important and often overlooked niche, displaying impressive attention to detail on tax."

The judges at the Prospect Think Tank Awards, November 2016

Workstreams

This is a long-term programme comprising several workstreams, each focusing on a distinct topic, challenge or issue. Further workstreams to be announced in 2017.

Quantifying the business case for responsible tax behaviour

What are we doing?

In partnership with Ipsos MORI, this workstream will identify and quantify the ways in which corporate tax behaviour leads to quantifiable business outcomes and added value.

Why are we doing it?

Whilst existing analysis to date has considered what the potential negative impacts or “risks” of irresponsible tax behaviour are, in general, responsible tax behaviour is viewed about as a “hygiene factor” rather than something which is integrated within wider corporate strategy.

We want to explore evidence around whether a positive perceptions of a company’s tax behaviour leads to quantifiable business benefits, as well as how companies may offset risks in their tax practices.

Furthermore, is it possible to quantify the “external benefits” of responsible tax behaviour on the communities, society, and the wider economy in which a business operates?

Key questions

• What are the business and market issues which stem from corporate tax behaviour and how does this relate to business strategy, corporate positioning and commercial goals?

• How do we define the different types of risk associated with corporate tax behaviour, such as reputational risks, direct costs, consumer attitudes and employee satisfaction?

• Can responsible tax behaviour produce added value for businesses? If so, how?

How do we get there?

Working with Ipsos MORI we will produce primary research into the implications of corporate tax behaviour, including how responsibility links to tangible business outcomes. We will identify weak points in evidence and theory and draw on insights from public polling, neuroscience and behavioural analysis.

Who are we working with?

This workstream is supported by Ipsos MORI’s Social Research Institute, a leader in public sector and social research.

Designing responsible tax policy for Brexit Britain

What are we doing?

Tax incentives aim to address market and system failures and are generally introduced to mitigate or rebalance some of these inefficiencies. However, they are sometimes seen as politically expedient and often are deliberated and implemented outside of the realms of public scrutiny.

In partnership with the TUC, this workstream will identify and review the conditions and criteria for the responsible design and implementation of tax policies, and how these principles apply to the future design and implementation of UK industrial strategy in a post-Brexit world.

This is a timely discussion in the context of Brexit and the ensuing debate about the UK’s industrial strategy. Whilst many have responded to the economic uncertainty in the wake of Brexit by calling for “business-friendly” competitive tax rates and reliefs, there are deeper questions to be asked around what Brexit will mean for long-term productivity, a balanced economy that offers opportunities to people across the UK, and the opportunities that arise to address other market failures that currently impede economic resilience. How should tax policy adapt to these longer term changes as well as the immediate political context, what does constructive tax policy making look like that serves the interests of all in society, and who needs to have a stake in the process?

Why are we doing it?

“This is an issue that clearly unites a range of different stakeholders. Many heavily contest using tax as a “political football” to attract certain voting demographics at the expense of others in society. For businesses, a competitive regime is secondary to certainty and simplicity in relation to the tax system in order to make long-term decisions. Scrutiny of political decisions is key too – whilst welfare expenditure and benefits are heavily scrutinised by Parliament and the media, civil society groups and the public lack insight into the rationale for, and purpose of, the £100 billion that goes each year into tax reliefs.” – Caroline Macfarland, Common Vision

“The TUC has championed the need for an active industrial policy for many years. We believe it is vital to address the regional disparities and structural in equalities in our economy that prevent the UK from providing good jobs and a decent standard of living for everyone. We have argued in support of strong policies to boost science and innovation, and we have supported various government initiatives in the area of industrial strategy. We would like to explore the opportunities which Brexit brings for new approaches to a coherent active strategy, but it is equally important that this is underpinned by responsible approach to tax reliefs and incentives.” – Kate Bell, TUC

Key questions:

• What are the underlying principles behind responsible tax policy making? When are tax reliefs, incentives and “deals” legitimate in addressing an economic imperative, what factors contribute to how they are used responsibly, and what should be the criteria for success?

• Once the government decides an incentive is legitimate and justified, how can the realisation of the benefit be ensured? How is the impact of tax reliefs measured and costs/ benefit valued?

• In the context of Brexit, what practical considerations will inform and influences changes to business tax policy? What principles will underpin tax policy making in relation to an industrial strategy which achieves balanced growth and jobs in the UK?

• How could disclosures of the aims and the outcomes of tax policies and incentives increase public scrutiny and understanding, and wider trust in tax authorities and government? What are the key questions we need to ask about tax policies in the context of Brexit?

How do we get there?

From January to April 2017 we will conduct a consultation with a range of stakeholders including TUC members, businesses, investors, academics, NGOs and civil servants, and draw on national and international examples, to discuss the underlying principles behind responsible tax policy making and where best practice can be identified.

This is also an opportunity to look at the wider market failures and longer-term issues around balanced and inclusive growth in the UK, and whether tax mechanisms could or should be deployed to address these.

These insights will be used to develop a “blueprint” for the conditions and criteria for responsible policy design, and how tax authorities and companies can implement and use these incentives responsibly.

Who are we working with?

This workstream is supported and sponsored by the TUC. The Trades Union Congress (TUC) is the voice of Britain at work. It represents nearly six million working people in 52 unions across the economy. It campaigns for more and better jobs and a better working life for everyone, and supports trade unions to grow and thrive.

Increasing and improving tax collection in developing countries

What are we doing?

With the aim of reforming the global tax system so that it “levels the playing field” for developed and developing countries, we have identified a series of areas to consider in order to build and improve the revenue collection in developing countries through tax. We will be exploring these issues in partnership with Wilton Park.

Why are we doing it?

Developing countries rely on collection of corporate taxes, in many ways more than other countries. At the same time, attracting investment from abroad and helping domestic companies to grow are key priorities for many governments. However, much of the current debate around the global tax system does not take developing countries as the starting point. There is a need to explore what measures can be taken by tax authorities, businesses, investors and global civil society to assist in these aims to build tax collection in developing countries.

Key questions:

• What sort of capacity building between companies, governments, investors and tax administrations will strengthen developing countries’ tax administrations?

• What skills and technologies are available to developing and emerging economies to build capacity in order to better manage tax revenues?

• What other factors beyond tax will help encourage investment and how does tax policy making contribute to these?

• How can companies help build a wider tax-paying culture in the countries in which they operate?

How do we get there?

We will hold a two-day conference with a range of stakeholders including those working in tax authorities across the world. This will include a series of plenaries and workshops to explore specific issues in more detail.

The conference will be complemented by a series of working group sessions prior to the conference in order to help develop the programme. We will also produce blogs, videos and animations around the conference. Through these activities we will explore what developing countries themselves want from inward investment, and illustrate where best practice of corporates, tax administrations and governments can contribute to these.

Who are we working with?

Wilton Park is an international forum for strategic discussion, focusing on issues of international security, prosperity and justice. Wilton Park organises nearly 65 events a year in the UK and overseas, bringing together senior representatives from the worlds of politics, diplomacy, academia, business, civil society, the military and the media.

Blogs

Who we've worked with

Our contributors

Our previous work

For the last two years CoVi has led various work seeking to build bridges between business and civil society around what constitutes responsible tax behaviour and how it is encouraged and enacted in practice. Whilst these were all distinct pieces of work, we now plan to draw on our experience and insights of where consensus exists and what can be achieved together in the future.

Working with business

From 2014-2016, in partnership with KPMG in the UK, we hosted a consultation with a range of business, trade groups and other taxpayers to explore the underlying principles of tax and map out the key areas of contention and consensus.

Working with politicians

Following a recommendation in one of our reports, we established an All-Party Parliamentary Group (APPG) in 2015 and provided Secretariat support and policy expertise to the Chair and Officers of the group in its first year.

Working with NGOs

We’ve also collaborated with civil society organisations including the Fair Tax Mark, Christian Aid, Action Aid and IBIS to share national and international perspectives on responsible tax from campaigners, businesses and investors.