LONDON Feb 14 Britain's government stepped up
its campaign against companies paying less than their fair share
of tax when it announced details on Thursday of new rules that
may bar corporate tax dodgers from competing for public sector
Companies bidding for government contracts will have to
provide details of their tax compliance history, including tax
returns that have been judged incorrect, under the draft new
"The government is clear that aggressive tax avoidance is
totally unacceptable," Danny Alexander, Britain's deputy finance
minister, said in a statement.
Britain's government, like many others around the world,
wants to clamp down on tax avoidance by companies as it tries to
raise more revenue and close its budget deficit.
Companies dodging tax would not be automatically banned
under the rules, but government departments would have the
option to terminate contracts and disqualify them from bidding
if firms were found to use abusive tax avoidance schemes.
When the issue hit the headlines last year, British
lawmakers singled out Google, Amazon and
Starbucks as companies that pay very little tax in
Britain on profit from sales in the country. The firms say they
comply with British tax law.
Last month Prime Minister David Cameron warned companies
which did not pay their fair share in tax that they needed to
"wake up and smell the coffee".
However, one legal expert warned the proposals could
unfairly hit smaller firms.
"Even relatively small contractors will be faced with
impracticable demands to show they are compliant with the tax
morals of the moment and no thought has been given as to how
firms will show they are on the side of the angels," said Aaron
Fairhurst, a tax partner with law firm CMS Cameron McKenna.
The new procurement rules were published for consultation on
Thursday ahead of their planned introduction on April 1.
The announcement came on the same day parliament's spending
watchdog, the National Audit Office, reported tax inspectors had
missed a target to reduce fraud and error in the system dealing
with government payments to low income workers by 850 million
Margaret Hodge, chairman of parliament's Public Accounts
Committee, said tax chiefs needed to "get a grip" on the issue.