OREANDA-NEWS. October 26, 2015. Last year SSE took the bold step of becoming the first FTSE 100 Company to be accredited by the Fair Tax Mark – the label for companies and organisations that are proud to pay their fair share of tax.

We did it because we wanted our all of our customers to have confidence that their energy provider is paying its fair share of tax.  It’s an annual process, and I’m proud to be able to announce that we’ve just been accredited again, for the second year.

So what’s changed since then? Well, frankly not quite as much as we would have hoped. There is still palpable public unease on this issue of whether big companies can be trusted to do the right thing on corporation tax.

Earlier in the year we commissioned pollsters YouGov to test the public attitude to big business and it came as no surprise that there was widespread mistrust. Our survey found that just 34% of the public believed that big businesses pay their fair share of tax; yet 80% believed that small businesses do.

Tax avoidance is a perfect illustration of why trust in big business has been disintegrating.  When UK households see reports of large scale tax avoidance, they see it as an apparent abuse of power. The perception is that there is somehow a different set of rules for those who hold the levers of power and wealth than there is for everyone else.  This is serious and ultimately gets to the heart of the legitimacy of big business to operate successfully within society.  

I believe Britain needs a healthy, growing and diverse economy – with big businesses, small businesses, co-operatives and social enterprises. But if the legitimacy of big businesses is under threat because there is a perception of different rules applying – real or otherwise – then we need to do something about it.  

At SSE, we were attracted by the Fair Tax Mark because it is an independent organisation that provides a framework for higher standards we can aim for – and a stamp of approval to give our customers confidence.  

To gain Fair Tax accreditation SSE published its Group tax policy, clearly stating that it does not use artificial tax avoidance schemes or tax havens to reduce its tax liabilities, and significantly enhanced the tax disclosure notes within its Financial Statements. These go well beyond the current requirements of UK company law.

SSE also provides country-by-country data stating exactly what it does, what profit it makes, and the taxes it pays in the two countries in which it operates. If we were ever to operate in more countries in the future, we would commit to doing the same too.  SSE also discloses its current tax separately from its full tax charge for each year; puts on record what tax reliefs and allowances it claims and what impact they have; and explains fully how its current tax bills and deferred tax interact.  

How much tax does SSE pay, you may well ask? In 2014/15 SSE paid ?506.2m in taxes and has contributed ?1.25bn in UK taxes over the past three years.   These taxes include property taxes, payroll taxes and taxes on profit.  Our contribution to the UK in profit taxes was ?176.4m in 2014/15 and in the Republic of Ireland it was €7.3m.  

Tax should not be thought of as penalties on profits.  Rather, it’s the proper way to give back to the society that’s helped you in the first place. That means they pay for the roads employees use to get to work, the hospitals that look after them and their families and the schools that give young people the key building blocks for working life.

I understand that external accreditation schemes like the Fair Tax Mark are not for everyone, but I do hope other big companies recognise the very serious lack of public trust we are facing.  So I would urge them to pause and reflect if they can’t do any more on this issue and demonstrate that they are in step with the public and political mood on fair tax.