Chief secretary to the Treasury, Danny Alexander, and Minister for the Cabinet Office, Francis Maude, today unveiled the measures, which are due to come into effect on 1 April, after the draft guidance undergoes consultation by the government.
The new rules, according to a report in ComputerworldUK will allow departments to ban suppliers from bidding for public sector contracts if they are found to be guilty of tax avoidance.
Conservative MP Charlie Elphicke recently claimed IT suppliers Oracle, Xerox, Dell, CSC and Symantec as some of the worst offenders. The IT suppliers insist, however, that all of their tax affairs comply with UK law.
The rules require potential suppliers to notify contracting departments of their recent tax compliance history, and to specifically tell the department if any tax return has recently been found to be incorrect.
Suppliers will also be required to disclose if they have been convicted for tax related offences or have been subject to a penalty for civil fraud or evasion. Departments will be able to disqualify any bidder meeting these criteria from the procurement process.
Once introduced, departments will also be able to include a new clause in contracts that allows them to terminate an agreement if a supplier subsequently breaches the new tax compliance obligations. Suppliers will be legally obliged to tell the contracting department if their status changes after the award of the contract.
