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Tax protests: Companies ‘need a strategy’

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Shops in many UK towns and cities were disrupted by tax protests again on Saturday, with several stores reported to have closed down temporarily on the last weekend before Christmas.

The protest group UK Uncut claimed that 55 protests were held against ‘public sector cuts and widespread tax avoidance by the wealthiest in society’. Police said 150 protesters targeted Topshop’s store in London’s Oxford Street, the Financial Times reported.

The Arcadia Group, which owns Topshop, declined to comment when contacted by Tax Journal.

A ‘quieter’ protest took place outside Vodafone’s Oxford Street store. A Vodafone spokesman told Tax Journal today that the company saw ‘only a small disruption to trading’, with a small number of temporary store closures. He added that ‘we pay all our tax bills in accordance with our obligations’.

The Daily Telegraph reported that a Marks and Spencer branch on Oxford Street was shut for around 30 minutes as 100 activists staged a ‘sit-down’ protest. A spokesman for the company dismissed the protestors' allegations, saying: ‘Marks & Spencer is a UK domiciled company and we pay tax in accordance with UK laws and regulations, as well as in each country where we operate internationally.'

The spokesman added: ‘We provide full disclosure to the tax authorities and in the last financial year we paid over £600 million of tax to UK HMRC and over £125 million in business rates to the UK government. Like many other UK companies, we obtain tax relief for our business expenditure. We also own a number of stores internationally where the profits made are subject to the local tax rates which vary from country to country.’

The Telegraph also quoted a spokeswoman for the CBI as saying: ‘We are disappointed at the apparent widening of these protests. We recognise the right to peaceful protest but the fact remains businesses operate in international jurisdictions and abide by the tax laws in those jurisdictions.’

‘A strategy is needed’
PR Week reported last week that Vodafone was ‘refusing to engage’ with the protesters, and quoted a spokesman as saying that he was ‘resisting any proactive PR drive to set the record straight’. One reason to shy away from proactive engagement, he suggested, was that the issue was 'too complex to explain in a succinct way'.

Bill Dodwell, Head of Tax Policy at Deloitte, has said companies need to consider how to inform shareholders and employees while being ‘careful not to over-react’ to events.

Writing in today’s Tax Journal, Dodwell said: ‘A strategy is needed, which could cover everything from choosing where to pay tax to a PR strategy (which could include simply saying nothing, of course). Companies pay about one third of the total tax in the UK and need to help get that message across.’

But he suggested that recording tax collected from others ‘isn’t a productive figure to report; it sometimes attracts negative publicity, when campaigners accuse companies of hiding behind their important tax collector role’.

Dodwell claimed that there is ‘no evidence’ that consumers support the tax campaigns. But it may be helpful to be able to remind consumers and politicians of the important contribution made to the UK economy by UK-based business, he wrote.