In a further attempt to quash tax avoidance, the Government have essentially put their money where their mouth is and will now be requiring potential suppliers to confirm their tax compliance as part of the procurement process. The new policy, which will be implemented in April 2013, means that individuals, partnerships or companies who wish to tender for Government business will have to self-certify their recent tax compliance history. If the Contracting Authorities subsequently determine that there has been an ‘occasion of non-compliance’ they will be able to invoke a standard clause which will enable them to terminate the contract.
Non-compliance will be defined using the new General Anti Abuse Rule (GAAR), which is to be enacted in the 2013 finance bill, the Targeted Anti Avoidance Rule (TAAR) and, for VAT, the “Halifax Abuse” principle. Non- compliance will also apply to users of schemes, which have failed, that were or should have been registered under the Disclosure of Tax Avoidance Scheme rules or where suppliers have been convicted of fraud or evasion. This will also apply to foreign suppliers who have tax obligations in foreign jurisdictions.
The policy will apply to all central Government above-threshold contracts advertised from April 2013 and it is expected that it will be used by:
• Central Government Departments
• Executive Agencies
• Non-Departmental Public Bodies
• Any Public Body
• Any Public Service Provider
The policy will apply to both UK and foreign suppliers who are participating in in-scope procurement exercises, sub-contractors who are performing a significant part of the contract as well as individuals, partnerships and companies bidding for any contracts above the threshold value.
Obviously proof of compliance will be dependent on certain documentation and the Government has determined that this will only be retained for a certain period of time and that earlier events could be disregarded; the current proposal is that 10 years is a reasonable period. It is intended that the new rules will apply to all HMR&C administered taxes including income tax, corporation tax, VAT, capital gains, stamp duty etc.
If you are working through an umbrella company, the umbrella company could be assessed for their compliance. Any umbrella companies that have had an association with tax avoidance could be under scrutiny, or any who have entertained EBT or Offshore Schemes.
Working with Contractor Umbrella, you can be safe in the knowledge we have been crystal clear since we started over 10 years ago.
Contractor Umbrella; the “safe” umbrella company.
Trusted by over 1,200 employees |