Tax could be a liberating tool for Scotland’s social economy
Posted: 24 June 2026, in News
It’s Fair Tax Week – social enterprises, charities and other social economy organisations can benefit from tax justice and reform.
What has taxation ever done for us?
Everyone has an opinion on tax. Often this is a negative view of the tax system, government waste or tax increases.
All social enterprises and charities pay some form of tax and are familiar with the complexities and barriers that exist.
There are of course many real, negative experiences – the ongoing impacts of the National Insurance increase being a notable example.
However, tax can be a far more liberating tool for social change than we perhaps realise.
A different perspective
If we care about investing in our public services, pensions and schools and having a fairer, more equal economy, we need to understand the role of taxation.
Our social economy can also directly benefit from the system, including non-domestic (business) rates relief, as well as direct government or local authority investment.
But there’s potential to do so much more to support our social enterprises and community groups with the power of tax.
How can we direct more tax spend towards social and environmental impact? What else could we do in terms of tax relief for social enterprises and other inclusive, democratic business models? What other tax innovations are there?
The toxic tax narrative
The media and political narrative about tax is often a highly negative one about the burden of taxation.
Tax is seen as something to moan about, something we reluctantly do, something that no one likes. This is why we need to urgently change the conversation.
Tax and spending is, in reality, a huge investment in people’s lives and in essential public services. It’s how we invest in our collective prosperity and wellbeing.
Tax is about paying for our healthcare, roads, policing, recycling, trains and social security – what’s more important than that?
Our use of language is important. We should be reclaiming wealth creation to mean wealth for all, in the context of Community Wealth Building, for example.
We may rightly get angry about tax when it comes to stories of avoidance and evasion by the wealthiest.
The Corporate Tax Haven Index shows how the UK is behind a massive one third of global tax dodging.
It’s the complex Spider’s Web, facilitated by successive UK Governments, while the narrative claims that “there’s no money left” for people and public services.
What next?
We’re happy to support calls for action from Tax Justice Scotland for the Scottish Parliament to use its tax powers for a greener and fairer Scotland.
While many powers are reserved to Westminster there are still countless tax options at a devolved level – but we urgently need some imagination and new policy solutions.
Tax revenues must be used to better invest in social and environmental impact organisations.
There’s an opportunity to both implement tax reliefs for social enterprises, while raising more tax from other areas, then investing it directly into these inclusive, democratic businesses.
Perhaps a form of Selective Employment Tax for profitable, polluting industries that benefits ethical businesses could be implemented.
Action must also mean replacing the failed Council Tax, reforming business rates, introducing new land and property taxes and ensuring future Crown Estate offshore renewable energy licenses contribute more community benefits.
It could mean attracting tax-paying workers from other parts of the UK, as well as private investment and also making sure more public sector pension funds are invested directly into communities.
By tackling devolved tax avoidance and fraud, making efficiencies with technology and working with the UK Government – including on reserved social investment tax reliefs – solutions can be found.
There’s a massive opportunity for Scotland to lead on new, imaginative methods of tax reform and to influence wider changes in the UK and globally.
The issue of tax could then potentially be transformed from a negative burden to a tool of liberation.
Duncan Thorp, Policy and Public Affairs Manager, Social Enterprise Scotland
END