Only time will tell if the amount of tax companies like Starbucks save outweighs the reputational damage as coffee lovers choose to seek their caffeine fix elsewhere long term.

 
 

PR consultants can make great tax advisers. Really?

The recent enquiries by MPs into the tax affairs of some of the world’s largest businesses thrusts a once popular business management phrase well and truly back onto the agenda.  Like organic food and - it could be argued - climate change, ‘corporate social responsibility’ seems to have fallen out of vogue since the beginning of the recession. 

The phrase itself undoubtedly has a PR problem and seems to be a peripheral objective for many – a ‘nice thing to have’.  But executives of Amazon, Starbucks and Google who had to sit in front of MPs recently to justify why their firms pay so little tax on their profits to the UK government might wish they had a more ethical mindset in place, whatever it’s called.  Business ethics expert Professor Roger Steare gives it a simple name – ‘doing the right thing’.

It may well be that the complexity of large organisations makes it almost impossible for PR teams to know exactly what agenda is being set by different divisions – and the likely communications impact. However, if a PR adviser was sitting in a meeting about how a perfectly legal accounting strategy could save the business millions of pounds a year, would he or see things from a totally different perspective?

The heat has already been turned up on Starbucks in particular with columnists pointing to rivals like Costa Coffee who seem pay a much fairer share of tax.  Only time will tell if the amount of tax companies like Starbucks save outweighs the reputational damage as coffee lovers choose to seek their caffeine fix elsewhere long term.

At a time when many individuals and families have seen their disposable income shrink and standard of living suffer – caused in part by tax increases or tax credit reductions – it shouldn’t take a genius to work out that companies who participate in tax avoidance schemes will not be looked upon favourably by Joe Public.

Very few PR consultants will be qualified to offer detailed tax advice.  But when it comes to the bigger picture, very few tax advisers will be concerned with the PR impact.  That’s why businesses need both professionals to do the right thing.

    
 
The Partners Group

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