What is the ethical issue?

Countries set out in law how their taxes should apply and businesses are expected to pay their taxes due under the law. But tax avoidance is an ethical issue because organisations have a choice about their approach to interpreting the law and how that translates through tax planning into the tax they pay. Whilst remaining legal, where a business draws its ethical line regarding how to interpret the tax laws is a matter of discretion.

Tax avoidance is a grey area, as it often refers to legitimate but aggressive use of financial instruments to obtain a tax result not intended or anticipated by the government. One example is the use of overseas tax havens.

Tax avoidance is seen by many as not operating within the spirit of the law and has been branded by some as an ‘immoral’ and unethical practice that undermines the integrity of the tax system.

Tax evasion is illegal.

 

IBE Guidance

A summary of good practice
  • Organisations need greater internal engagement around the decisions and circumstances behind their tax policy and the stance they take.
  • In the UK, if a company is a certain size (turnover above £200 million, balance sheet of over £2 billion) it must publish annually its tax strategy. 
  • This then needs to be communicated externally, explaining the business decisions that have led to where and how much tax has been paid. This transparency is helping to restore trust with the public.
  • It is good practice for all other organisations to have a clear and transparent statement regarding their position on the payment of tax, guided by their ethical values. 

 

Further resources

Publication type: Survey

IBE Survey - Ethical Risks 2024

19 February 2024

IBE news

Fraud fears rise due to tightening economic conditions

19 February 2024

Blog

What are the ethical risk factors business leaders are most concerned about in 2024?

19 February 2024

Blog

Good Business Week 2024 by Julian Richer & Jenny Herrera

08 February 2024

Blog

Fair enough?

Deputy Director, Rachael Saunders outlines some of the key findings from the 2023 Attitudes of the British Public to Business Ethics survey.

13 July 2023

IBE news

Fewer Britons believe businesses operating ethically: new poll

11 July 2023

Publication type: Survey

Attitudes of the British Public to Business Ethics 2023

The findings from the IBE's 2023 annual survey on British public attitudes toward business ethics reveal fewer believe businesses are operating ethically.

11 July 2023

Blog

Businesses need to be transparent on taxes as public disquiet reaches record high

Read our latest guest blog by Graham Drummond, Head of Communications at the Fair Tax Foundation.

04 July 2022

Blog

Is your business ethical - and do your stakeholders think so?

Listen in as Survey Director, Christopher Cowton shares his thoughts on our latest survey, IBE Attitudes of the British Public to Business Ethics 2022.

30 June 2022

Publication type: Survey

Attitudes of the British Public to Business Ethics 2022

Businesses and UK politicians must do better at demonstrating their ethical credentials if they are to win back the confidence of the British public - the 2022 results of the IBE's annual survey of the attitudes of the British public to business ethics.

29 June 2022

Publication type: Survey

Attitudes of the British Public to Business Ethics 2021

Britain’s businesses could behave better - the 2021 results of the IBE's annual survey of the attitudes of the British public to business ethics.

17 January 2022

Blog

Attitudes. Ethics. Trust.

In this blog, Guendalina Donde, IBE's Head of Research, discusses the results of the 2020 Attitudes of the British Public to Business Ethics survey.

13 January 2021

Publication type: Survey

Attitudes of the British Public to Business Ethics 2020

The 2020 results of the IBE's annual survey of the attitudes of the British public to business ethics.

30 December 2020

Publication type: Business ethics briefing

Business Ethics in the News 2020

This briefing provides an overview of the ethical concerns and lapses that were recorded by the IBE in its monitoring of media coverage in 2020.

23 December 2020

Blog

#PandemicAndBeyond - 20:20 Hindsight

In the first blog of the series, Pandemic and Beyond: the ethical issues, Mark Chambers, IBE’s Associate Director (Governance), introduces the series and reflects on the year so far.

02 September 2020

Publication type: Business ethics briefing

Business Ethics in the News 2019

This briefing provides an overview of the ethical concerns and lapses that were recorded by the IBE in its monitoring of media coverage in 2019. It gives an overview of which sectors and issues related to business ethics were most covered in the news. For 2019, we have recorded a total of 361 different stories involving lapses of companies with a UK presence.

29 January 2020

Publication type: Survey

Attitudes of the British Public to Business Ethics: 2019

The 2019 results of the IBE's annual survey of the attitudes of the British public to business ethics.

17 December 2019

Webinar

What are the hot ethical topics E&C practitioners need to know?

03 June 2019

Publication type: Other

A Year In Review: Ethical Concerns and Lapses 2018

Read the IBE's annual analysis of business ethics news stories from the last year - which were the sectors and issues most in the news in 2018?

30 January 2019

Publication type: Survey

Attitudes of the British Public to Business Ethics: 2018

The 2018 results of the IBE's annual survey of the attitudes of the British public to business ethics

13 December 2018

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