OUTLOOK: Justin King was right on taxes... Just because it isn't illegal, doesn't mean it's acceptable

 

What was so striking about last year’s call by the Sainsbury’s chief executive, Justin King, for firms to demonstrate some “morality” over corporation tax payments was that he broke ranks with his fellow bosses on the subject.

What was so striking about last year’s call by the Sainsbury’s chief executive, Justin King, for firms to demonstrate some “morality” over corporation tax payments was that he broke ranks with his fellow bosses on the subject.

The heads of large businesses like to give the impression they are in relentless competition with each other, but the truth is that it’s a conservative and crony-ish world. King defied the corporate conventional wisdom in tax, which holds that if behaviour isn’t illegal, then it’s acceptable.

It’s a shame, in that context, to learn, thanks to The Independent, that the supermarket’s incoming boss, Mike Coupe, invested in a film partnership scheme with tax advantages. Sainsbury’s has pointed out that film investment tax breaks were promoted by the last Government. Others have argued there’s no difference between putting money into these funds and sheltering money from the taxman through an ISA.

Except the tax authorities evidently don’t think so. They have shut down some of these schemes and keep a close eye on the rest.  Wouldn’t any sensible person in the public eye look at film partnership funds and hear warning sirens?

Should a distinction be drawn between personal tax decisions, like that of Mr Coupe, and those related to corporate tax? Most people would say that morality cannot be so neatly separated. In the end, Mr King put it best: “You can’t claim to hold a trustworthy space on any issue by just saying ‘I’m operating within the law’ ”.

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