Council calls for an end to major tax avoidance by businesses

Chelmsford City Council has passed a motion to be an example of good tax conduct and encourage businesses it deals with to have good tax practices.

As a result, the council has become the 26th council in the UK to become a Fair Tax Council.

The scheme asks councils to support tax justice with a range of measures, including promoting Fair Tax Mark accreditation. Chelmsford City Council now joins 25 other ‘Fair Tax’ local authorities across the UK.

Chelmsford City Council motion passed with an amendment

The motion to support the Fair Tax Declaration was raised by Cllr Richard Hyland. An amended version of the motion, proposed by Cllr Chris Davidson, the Cabinet Member for a Fairer Chelmsford, was passed by Full Council on 20 July.

Cllr Davidson says councillors have agreed to a version of the commitment which retains the spirit of the declaration within what’s possible for the local authority to deliver.

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"I’m grateful to Cllr Hyland for raising this important issue that affects every single person in this country. At its heart, this motion is about fairness in who pays the tax that pays for public services. We are appalled by the tax avoidance some multinational companies have used. This amounts to unfair competition that disadvantages businesses that play by the rules.

Investigating this is a hugely complicated task which HMRC is responsible for. It requires a highly specialised skillset which the City Council cannot realistically employ staff to have. I hope this motion will allow us to demonstrate our dedication to fairness without promising things our staff aren’t able to achieve."

Cllr Chris Davidson, Cabinet Member for a Fairer Chelmsford

Positive tax contributions recognised

The Fair Tax Declaration and Fair Tax Mark seek to recognise businesses that pay the right amount of corporate income tax at the right time and in the right place. Fair Tax Mark businesses include listed PLCs, co-operatives, social enterprises and large private business.

Cllr Hyland says supporting the Councils for Fair Tax Declaration is the natural next step for the council, which has already championed fair trade.

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"By passing this motion we are again seeking to lead by example. Everyone needs to pay their fair share of tax, especially now when public spending is under such intense pressure, and we need to maintain public services to help people suffering from the cost-of-living crisis.

Tax contributions are a key part of the positive social and economic impact made by business – helping the communities in which they operate to deliver valuable public services and to build the infrastructure that allows our city to thrive."

Cllr Richard Hyland, Galleywood Ward

ICM poll for Fair Tax Foundation

A recent poll of 2,000 adults across Britain carried out by ICM for the Fair Tax Foundation found that two-thirds of respondents agreed that the Government and local councils should at least consider a company’s ethics and how they pay their tax along with value for money and quality of service.

Mary Patel, Networks Manager at the Fair Tax Foundation says more engagement in tax justice is welcome at every level.

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"We’re delighted that Chelmsford Council is standing up for responsible tax conduct by supporting the Councils for Fair Tax Declaration in this way – doing whatever they can to advocate for tax justice.

All levels of government have a role to play in promoting fair tax practices and it’s incredibly encouraging to see a growing list of local authorities prepared to make this commitment."

Mary Patel, Networks Manager, Fair Tax Foundation

Letter to the Chancellor

As part of the council’s Fair Tax commitment, Cllr Davidson will now write to the Government on behalf of the City Council and the residents of Chelmsford.

His letter will express the city’s concern about corporate tax avoidance due to devices like profit-shifting that some multinationals have used to avoid paying a fair amount of tax in the UK and will press the Chancellor to stamp these practices out.

More information about Councils for Fair Tax can be found on the Fair Tax Foundation’s website.