When Lush first started in Japan, one of the things we noticed was that our Japanese accountants and finance inclined colleagues were not interested in any tax schemes and, at the time, this came as a bit of a shock as we had been operating in areas where it was so traditional and ingrained for businesses to maximise a situation for their own benefit and to pay as little tax as possible – it hadn’t even occurred to us that paying tax was an ethical issue. We are firm believers that companies have an obligation to their communities and their governments to pay their fair contribution to society.
We know tax has become a dirty word and is usually only followed by negative feelings, however we believe that as a business we have a responsibility to contribute to our communities by paying our fair share. This idea that tax is the common enemy of all people has led some companies to think that it is somehow acceptable to manipulate their business structures and accounting practices to avoid paying their contribution. But this attitude is not just self-serving and detrimental to transparency, it is also short sighted, because those taxes are what will keep the infrastructure of our society in place and deliver healthy customers to our doors on well maintained, clean, lit streets. Our customers know that education, health services, welfare and social care structures are essential and need to be paid for from the collective purse and we don’t want to take advantage of inequitable loopholes to evade tax responsibilities whilst they, as individual members of the public, have no way to opt out of the tax deductions from their own wage packet.
“What is very important is you have honest and forthright feedback, back and forth, especially on the figures because you don’t want to make a mistake on the figures. If you start introducing tax schemes into that, you’ve lost transparency. You can no longer see what it is you’re supposed to be doing so you’ve got this compilation coming into all the workings. If everyone were to be more clear and straightforward and not bother with the schemes, I believe there would be a great improvement in standards of business and much more time to do things more worthwhile. It’s interesting that you worry that if you declare in your accounts everything that you are doing in such a transparent way, people can see where you’re not doing so well, people can see where you’re doing well and they can take advantage of you … but i’ve realised over the years that’s not the case. I think if you have well motivated staff and a good vibrant business you can actually go out there and you can act as something of a model — it’s ok to wander about in your underpants as it were.” – Mark Constantine, Co-Founder
At Lush, we believe that we should pay a fair tax in each of the countries in which we operate. We will take advantage of legitimate business tax structures and benefits available in each country – but we will never search for loopholes or devise schemes that stretch the rules beyond their obvious intended purpose. We want our customers to thrive in their communities and we know that taxes are needed for this. As a company, we feel we should contribute back into the societies from which we trade by being a good employer, by trading fairly with our suppliers and by paying our taxes into the collective purse.
I realised when you started talking to accountants in other parts of the world, none of them were really wanting to do all that rubbish. It was complicated and they didn’t like it and it always felt slightly tacky, so it didn’t take too much of a push before we realised nobody wanted to do any schemes.
Fair Tax Mark
To prove that we are upholding our Company Tax Policy, we started working with the Fair Tax Foundation in 2015. The Fair Tax Foundation believes that companies demonstrating responsible tax practices should be recognised and celebrated and help achieve this with the Fair Tax Mark which certifies that we seek to follow the spirit, as well as the letter of tax law; that we shuns corporate tax avoidance such as the artificial use of tax havens; and that we are transparent about profits made and taxes paid.
We have been accredited by the Fair Tax Foundation since 2015 and were the first high street multinational company in the UK to be awarded the Fair Tax Mark.
However, whilst we acknowledge our obligation to pay tax, we also recognise our right to speak out about how those taxes are spent by governments. We will continue to publicly campaign on a variety of issues and press for a kinder, fairer society, so that all of us can pay tax into a system we can feel proud of, and which supports everyone in society equally.
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