I won’t go into the ins and outs of which companies are or aren’t paying the right amount of tax. You will have read, watched or heard the arguments time and again.
Inevitably, we think about this as customers of the brand names perceived as having not paid enough. I pondered this when putting a cooking pot back on the shelf at the independent hardware store in the small town where I live, knowing I could find it, or something similar, for 30pc less on Amazon.
Aside from the tax-for-hospitals-and-schools argument, it would weigh on my sense of fairness that Bishops, my local hardware store, might be fighting with one hand behind its back. It already lacks the scale and efficiency of a large company, but if it also has to hand a greater share of profits to the taxman than online rivals, it’s almost certain to lose.
As customers, we think about this, but we also should as investors.
I’m a big fan of Amazon. I pay £79 a year for Amazon Prime, which includes not only one-day delivery but music streaming and some watchable TV shows on Amazon Video.
It’s why I’m happy to invest in the company, indirectly. I hold a sizeable chunk of my self-invested personal pension in Scottish Mortgage investment trust. It is a fund that has delivered impressive returns because its manager James Anderson has shown shrewd understanding of how the world will change and which companies will profit from it (the fund makes our “Telegraph 25” list of favourite funds – go to telegraph.co.uk/25).
Amazon is the biggest holding in the portfolio, at 9pc.
- Is it worth paying extra for Amazon Prime?
As the Google tax backlash boiled over, I was encouraged to see Mr Anderson voicing opinion on the companies he holds, saying it was “in the long-term interests of Google and others of that ilk to pay decent rates of tax and that they, and others, would be best served in taking the lead in volunteering this”.
His fund holds £130m-worth of shares in Google’s parent company Alphabet, making up 3.8pc of his portfolio. He has also invested slightly more in Facebook, at 3.9pc.
The counter argument is why pay more tax than legally required?
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Maybe the solution is lower tax rates for bricks and mortar stores. Scrapping business rates, at least, would be a start.
For now, I simply applaud Mr Anderson for raising the issue on behalf of investors. All fund managers should do more to represent the interests of shareholders, across a range of issues.
I’ve never been a faddy ethical investor but I believe my money should be invested in ways that improve the world, or, in Google’s parlance, that they “do no evil”.
So I’ll certainly hold on to my Scottish Mortgage shares but I also want Bishops to still be trading on our high street in five years.
And, next time, I won’t put the Le Creuset pot back on the shelf.
@andrew_oxlade
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