Utilising sustainability initiatives to drive business value

Big changes sweeping through the tax and reward landscape means that companies need to be better prepared to ensure they can drive success along a road often potholed with reputational risks.  

The past decade has witnessed a change in gears from where organisations previously sought to minimise tax bills to now focusing on how tax behaviours align with culture and sustainability to attract and retain the best talent.  

Transparency in tax affairs  

HMRC has stepped up scrutinising tax affairs. This has prompted a shift towards greater transparency and diligent reporting. This willingness to be more compliant has no doubt also been ignited by today’s ‘naming and shaming’ culture, made evident with companies and individuals being brought to account on expenses, employment status (IR35), National Minimum Wage and the Covid-19 financial support schemes (including furlough).  

The Covid-19 pandemic has marked a change in how people want to work (be that home, the office or overseas). Consequently, companies have started to fall more into two distinct camps — protectionists (get back to the office) or internationalists (work from anywhere).  

There has been a war for talent ensuing too, making the approach to tax and sustainability an even more critical area for future growth, recruitment and success.  

Reaching environmental, social and governance goals 

Ian Goodwin, Employment Tax and Reward Partner at Mazars is well aware of the increasing pressures on companies to find and retain the right talent, but also to grow and drive overall value for their businesses. 

 “There are many approaches, but from a practical perspective, I have been helping organisations to think about how they can best support their employees and attract future talent through taking tax governance seriously and realigning their reward strategy with their ESG approach,” he explains.  

Ways to help employees  

Already, many businesses are updating travel policies to incorporate hybrid working, as well as electrify vehicle fleets (reducing tax bills for their employees). Businesses can also consider ways of supporting workers with energy bills and childcare to further help with staff retention.  

Changes in immigration rules and Brexit have made effective recruitment strategies difficult to navigate and drive forward. With the right support, companies could look at how they can attract and develop talent through training schemes as well as how they recruit from outside the UK.  

Sustainable growth will be driven by attracting and retaining the right people but having a critical eye as tax inspection and wider behaviours intensifies.  

“Given there are so many tax and reward risks organisations must deal with — for example, benefits, travel costs, national minimum wage and off payroll contractors — gaps between specialisms and responsibilities can leave potential exposures. It is therefore vital to establish clear governance and policies. Further, there is likely to be a rise in the role of the ‘Chief Tax Officer’ position to integrate tax with other parts of the business and with automation and technology,” says Goodwin.  

“The future can be green for businesses when they make sure their reward and approach to tax aligns with their sustainability strategy.” 

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If you require further information or support with your tax challenges, please get in touch today. 

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This article originally appeared online on www.businessandindustry.co.uk, you can view the original article here.   

All statistics mentioned were taken from the latest Mazars C-suite barometer, an annual survey conducted with C-suite executives from across the world.