LONDON, 21-10-2015 — /EuropaWire/ — Businesses must take further steps to demonstrate to the public that not only are their tax affairs legal, but that they are responsible taxpayers, according to the CBI.
In 2014, business paid nearly £175 billion in tax – 29% of all taxes, the largest contribution from any group of taxpayers – and enough to pay for all Government spending on schools and the NHS combined. Despite such a significant contribution to the public purse, the popular perception of businesses tax arrangements is far from positive.
It comes as an Ipsos MORI survey conducted on behalf of the CBI’s Great Business Debate – a campaign aimed at building public confidence in business – revealed that nearly a quarter of customers (23%) have actively avoided a company within the last year because of its tax affairs.
The survey also showed that, on average, the public thought there was a 31% gap in what HMRC expects to collect in Corporation Tax and what is actually paid. 2012-13 HMRC statistics show that the actual figure is 9%, £3.9 billion for that year.
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 £175 billion tax contribution 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 understands 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’s updating of international tax rules, so they are fit for a globalised world and create a level playing field for businesses to invest, grow and compete.”
Other key findings from the general public survey include:
- Nearly half the public (43%) say requiring business to clearly explain the amount of tax they pay would increase their trust in business as responsible taxpayers.
- On average, people think over a third of businesses (36%) have not paid the full amount of tax they should on their profits, their purchases or other tax responsibilities in the last year. However, this compares with people thinking that just over a quarter (28%) of private individuals have also not paid the full amount of tax they should in the past year.
- Nearly two-thirds of people (64%) think business doesn’t care whether the public think they pay their fair share of tax. 61% think businesses don’t even pay the fair amount of tax.
- Almost eight in ten (79%) think it is the Government’s responsibility to ensure that businesses pay the right amount of tax by making the rules clear, enforcing them and closing loopholes.
- Nearly three quarters of people (71%) think the Government is not doing enough to prevent corporate tax avoidance.
The CBI has set out a Statement of Tax Principles to guide companies in conducting their tax affairs. It has also backed the OECD project to update international tax rules, including for the digital age.
For all press enquiries please contact the CBI press office
020 7395 8239
SOURCE: The CBI