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 can demonstrate alignment to their values and pioneer the promotion of responsible 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 Foundation 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. Recent research has found that the UK loses an estimated £17bn in corporation tax revenues 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.

Has your council got behind fair tax?

Find out if your council has signed the Councils for Fair Tax declaration and/or shown significant support for the Fair Tax Mark. If they haven’t you can reach out to them via post or email and ask them to sign the declaration.

Write to your local councillors in support of fair tax

We have drafted an email you can send to your local councillor, or if you prefer contacting them by post we have created a template letter. The email and letter are also available in Welsh.

If you’re not sure who your local councillors are, you can find out.

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: +44 (0)161 513 8129

FAQs

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

Unfortunately it’s not that easy. A legal opinion we secured confirmed that it’s very difficult to exclude potential suppliers on the basis of poor tax conduct. Whilst the UK has now left the EU, the UK’s public procurement regime remains closely aligned with the rules that were in place beforehand. Therefore there is not, as yet, greater scope for addressing supplier 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 £17bn of UK 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 Foundation is grateful for the ongoing support of the Barrow Cadbury Trust, as well as support from Trust for London, in connection with its Localities work programmes.