WPP’s Sorrell starts 2013 by putting his foot in it – paying company tax is voluntary he says

WPP CEO Sir Martin Sorrell relishes his bully pulpit, the platform he has to opine on business affairs and much else besides.

And this morning he addressed the UK’s radio listeners with the observation that the amount of money companies paid in tax was a “question of judgement” rather than a matter of playing by the rules set by dim-witted tax authorities and governments.

Even more bizarrely he went on to opine that such payments that were made were determined by companies’ own sense of corporate social responsibility rather than trifling matters like national laws: “If companies choose to make a contribution to all their stakeholders, all credit to them.”

By stakeholders he presumably means the countries (and their taxpayers) in which such companies operate as well as shareholders, employees and the like. The only thing that makes companies pay tax at all, he seems to think, is the threat of consumer boycotts: “doing good is good business.”

While it’s probably true that every big company in the world could move its tax domicile to the Cayman Islands that’s hardly tenable: even the doziest governments/tax authorities (like the UK’s) would probably wake up to it and do something about it.

WPP has, of course, recently returned from Ireland to the UK although, interestingly in the light of Sorrell’s comments, it’s technically based in Jersey. So is WPP going to be paying UK corporation tax or the rather lower rates pertaining in the handily-situated Channel Island?

Sir Martin might wish he’d followed the example set by many in the UK this post-New Year morning and stayed in bed.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

One comment

  1. The little bugger should learn to keep his pie hole shut… Otherwise. he’ll never get his Saatchi Lordship. Poor old David never even got his Knighthood. Just ‘cos he told everyone the Duke of Edinburgh was a wanker! He must be spinning like a top under the Toufou turf.
    Cheers/George “AdScam” Parker