UK cities, towns and districts standing up for responsible tax conduct

Councillors across the UK work hard to serve their local communities and help direct the delivery of essential public services. By signing up to the Councils for Fair Tax Declaration, councils demonstrate alignment to their values by committing to take the lead in the promotion of exemplary tax conduct through:

  • leading by example on their own tax conduct
  • demanding greater transparency from suppliers
  • calling for more meaningful powers to tackle tax avoidance amongst suppliers when buying goods and services.

Research commissioned by the Fair Tax Mark from DatLab has revealed that between 2014-19, a huge 17.5% of UK public procurement contracts – with a combined value of £37.5bn – were won by businesses with connections to a tax haven. The UK Government has closed many tax avoidance loopholes in recent years, but an estimated £7bn of corporation tax receipts are still going astray as a result of profit-shifting alone.

Significantly, polling has found that two-thirds of the public agree that the government and local councils should consider a company’s ethics and how they pay their taxes as well as value for money and quality of service, when undertaking procurement.

Resources

The process

Step 1: register your interest in the Councils for Fair Tax Declaration using this quick online form

Step 2: download the declaration

Step 3: review internally – don’t forget to keep us updated! Once approved internally, your council could make a public commitment to sign up to the declaration.

Step 4: pass a motion committing your council to taking action on responsible tax conduct.

 

The declaration is a self-assured process but please do keep us informed, especially if you’re planning to make a public announcement.

Contact us

Email: local@fairtaxmark.net

Telephone: 0161 769 0427

FAQs

Can’t we simply exclude tax-dodging companies from our procurement process?

Unfortunately it’s not that easy. Cities and towns across Europe have tried this approach and a legal opinion we secured confirms that it’s very difficult to exclude potential suppliers on the basis of bad tax conduct. So, the declaration focuses on pursuing good tax conduct where possible; encouraging tax transparency and bringing the voice of councils to the call for reform of procurement rules.

What’s profit shifting?

Profit shifting describes tax avoidance strategies employed by some multinational firms that exploit gaps and mismatches in tax rules to artificially shift income and profits to low or no-tax locations. An estimated £7bn of corporation tax receipts are still going astray as a result of profit-shifting alone, significantly reducing the corporation tax contributions that support vital public services across the UK.

How does this fit with social value?

Social value is becoming an increasingly important factor in councils’ procurement considerations and at the Fair Tax Mark we fully support this approach. We believe that ‘good’ tax conduct should be a core public procurement consideration as part of maximising social value. Not only because it helps level the playing field for competing suppliers and bolsters the national corporate tax take, but it also enables better identification and mitigation of financial and corruption risks by contracting authorities. The addition of tax considerations would help ensure that suppliers had good economic and financial standing. Good tax conduct is not yet part of the policy metrics of central or local government social value in procurement, but it should be.

Funding

The Fair Tax Mark is grateful for the ongoing support of the Barrow Cadbury Trust in connection with its Localities work programmes.