With the UK now outside the European Union, and an independent member of the WTO’s Global Procurement Agreement, the UK Government is looking afresh at the legal framework for public procurement, its role and aims.
From a fair tax perspective, reforms proposed in the ‘Transforming public procurement‘ Green Paper cover some new and welcome ground. For the first time we would see non-disclosure of supplier beneficial ownership (i.e. identification of those with significant control of a business) be deemed as a mandatory bar to contract bidding. A central debarment register is also proposed, together with the introduction of more open and transparent data standards. All of the Fair Tax Mark’s accreditation standards require robust beneficial ownership disclosure, at thresholds below those currently required by legislation.
However, more still could be done to drive out the corrupt and recognise responsible tax conduct. So, in our response to the Government consultation, we have urged a number of additional requirements be pursued. The following should be a condition of contract award:
- suppliers should provide a publicly-available tax policy that explicitly shuns tax avoidance and the artificial use of tax havens and low-tax jurisdictions; and,
- the consolidated annual profit/loss of the parent company should be publicly available within the UK, together with details of associated corporation tax payments (total, current and deferred tax payments), with multinational businesses disclosing this on a country-by-country basis.
If a business is not actively involved in tax avoidance, these conditions can quickly and easily be committed to. These additional requirements align with the ethos of our Councils for Fair Declaration, which has resulted in 11 municipalities explicitly committing to fair tax practices (everyone from the City of Edinburgh to the Royal Borough of Greenwich).
You can read our full response here.
Our submission is supported by a number of tax justice and other groups including Tax Justice UK, Tax Research LLP, Church Action for Tax Justice, Association for Accountancy and Business Affairs, UK Women’s Budget Group, Centre for Local Economic Strategies, Taxpayers Against Poverty, Ethical Consumer Research Association and Co-operatives UK.
Mary Patel, Networks Manager