Tax: the business ethics issue of our time

There’s barely a month that passes without a corporate tax avoidance scandal in the news headlines.  In December 2016, an annual survey [1] of British attitudes to business ethics found that corporate tax avoidance not only remains in the top spot as the issue of most concern, its prominence has increased.  While executive pay has long been a concern to the British public, corporate tax avoidance is nearly twice as concerning. The message is clear:  the payment of corporation tax is not simply a set of rules; it is an issue of significant ethical judgement.

Given this clear and unambiguous position of public concern, the most important question is:  what should big business do about it?

At SSE, we can’t speak for other businesses but we can speak for ourselves.  We started by researching the issues lying behind these concerns.  The first thing we found was that the problem is one for big business and not small business.  According to a survey commissioned by SSE, 34% of the British public believe that big businesses pay their fair share of tax, in contrast to 80% believing that small businesses do [2].

So, as a large UK listed company, SSE set out exactly what we stood for.  We published a tax policy stating explicitly that we seek to be a responsible taxpayer: we rule out the use of tax havens and will never use artificial profit shifting mechanisms to avoid tax.

The second message from the research is the public don’t trust companies to tell them the truth about their tax affairs.  That’s why we sought to work with the Fair Tax Mark.  The Fair Tax Mark is an independent accreditation initiative, like Fair Trade, that sets a series of standards companies must meet in order to achieve their accreditation.  It was vital to us that our customers and stakeholders could be reassured that our promise to be a responsible taxpayer was backed up independently.

While Fair Tax Mark accreditation could benefit many other companies, we recognise it might not be for everyone.  What is apparent is the imperative for all companies to disclose more about their tax affairs.  In October SSE published a Talking Tax 2016 [3] booklet which provides increased transparency and explanation of SSE’s tax disclosure for financial year 2015/16.  And for the first time, we published our tax strategy – something that all companies must do under new reporting rules.  We designed the document to be accessible to non-tax specialists but we are very open to feedback that might tell us otherwise!

I like to think, as individuals, we have a ‘deal’ with the society we live in. In exchange for having a National Health Service, being educated in schools, colleges and universities and having our communities policed – we contribute, where we can, though our taxes. It is no different for companies. SSE directly benefits from its employees being taken care of if they are sick, from the educational achievements of our people, and from the infrastructure that means we can get people and services to our customers.

SSE needs the public services provided in the UK and Ireland, without them, we couldn’t possibly be as successful as we are.  That is why tax can no longer be thought of as a dreary technical issue to be managed.  Ultimately, it comes down to an attitude about a company’s role in the society it operates within.  And that’s why big business must work harder to prove to its customers that it takes its responsibilities seriously.

[1] Institute of Business Ethics, Attitudes o f the British Public to Business Ethics, 2016

[2]  YouGov (2015)Survey commissioned by SSE and ICAS and undertaken by YouGov:

[3] Talking Tax 2016,


Rachel McEwen

Rachel McEwen

Rachel is the Director of Sustainability at SSE plc. She was formerly a speech writer, campaigner and advisor.
Rachel McEwen


Work for big energy company. One day I hope to spend all my time growing plants.
RT @_youhadonejob1: Cannibalism. - 2 days ago
Rachel McEwen
Rachel McEwen

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1 Response

  1. This is great stuff! Clearly, we as individuals have a responsibility to contribute, where we can, to the services, provided by the state via the payment of tax. Rachel argues correctly that the same principles apply to companies – they need to contribute via the tax system to pay for the services provided by the state.

    However, I would go a step further and claim that all of us as individuals, working for a company, have an obligation to ensure, the best we can, that our company pays a responsible level of tax.

    Whereas, I am not a fan of compulsory workers representative on boards (this may be good for some companies but not for others), I do believe that the company’s ethics or purpose officer should have an important presence at Board Level. If a company does not have someone in charge of ethical values in a business, then they should have!

    With regards to the ethical values in a business, I believe in giving more “power to the people”