On Lush, UK Uncut, and Tax Compliance

Apr 27th, 2011 | Filed under Politics

Word on the street is that Lush, the ethical cosmetics company, has donated £10,000 towards the legal costs for the UK Uncut protesters arrested in Fortnum & Mason. I’m not entirely clear whether the donation to Green and Black Cross is specifically for the UK Uncut protesters, or for more general running costs (not least of all because the request for funding came prior to the March 26th direct action), but the overall idea is a great one.

Cue a flurry of right wing trolls claiming that UK Uncut are hypocrites for accepting this money, since as a charitable donation (though I’m unclear as to whether it would be treated as such for tax purposes) it would enable Lush to “avoid” tax. Calls for UK Uncut to protest against Lush for tax avoidance etc…

This is, in strict taxation terms, “bullshit”.

Taxation does not exist solely to redistribute wealth, and I have yet to find anybody who thinks it does. Tax is also used in order to incentivise specific behaviours which are considered to have a positive effect on society. Tax relief on charitable donations is one such example – the whole point of offering that to companies is to encourage them to give charitably. That Lush are doing so is an example of Tax Compliance, that is to say using the tax system in exactly the way in which it has been designed to be used.

At no point have UK Uncut campaigned against tax compliance. Even in the case of Fortnum & Mason, it’s not their charitable donations that cause concern, it’s the underlying structure of the business that enables them to avoid tax that should be owed even after the charitable donations are taken into account. Feel free to do independent research into that if need be..

Tackling Tax Avoidance is the agenda of UK Uncut, businesses that are operating outside of the spirit of the law but within the letter, in order to maximise their profits at the expense of the treasury. In the cases of Vodafone, Arcadia, Boots, and every other UK Uncut target, the core of the issue has been that the behaviour of the companies violates our sense of fair play, and promotes greed.

If the right wing trolls think that Lush are demonstrating greed by giving to charity, in exactly the way that the tax code promotes and incentivises, then perhaps they want to go back to the literature and read up some more. What Lush are doing is operating within both the letter and spirit of the law, and making ethical choices while doing it. They’re a shining example in a corporate landscape that could do with some guidance these days.

Update: As has been pointed out by a couple of people elsewhere, there’s no evidence that this donation has been made in such a way that it would even qualify for tax relief, since neither UK Uncut nor GBC are registered charities (recognised at least in passing in the brackets in the second paragraph). Nevertheless, I still think it’s important to highlight that even if there were tax breaks, it wouldn’t make such a donation incompatible with UK Uncut’s anti-avoidance stance.

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  1. Paul o
    May 2nd, 2011 at 12:16
    Reply | Quote | #1

    Your story is not quiet right

    According to Lush, the journalists have got the story wrong. Lush said
    The journo was determined that the story was that we were supporting UKUncut, although that is not strictly the case. The £10k donation was agreed for Green and Black Cross,and was agreed before Fortum and Mason’s occupation. The journo seemed to think that since Green and Black Cross are supporting UKUncut activists giving them a donation amounted to the same thing as giving to UKUncut directly.

    Why does it matter? If courts believe that a millionaire is paying the fines, they may instead take the route of giving people community service rather than a fine which is worse in some ways as it takes people out of action