The government has introduced new rules intended to prevent companies from minimising their UK tax bills.
The rules will come into effect on 1 April 2013, are outlined in draft guidance published for consultation by the government.
Under the changes potential suppliers will have to notify contracting departments of their recent tax compliance history, and tell the department of any incorrect tax has been filed; or of any failed avoidance schemes.
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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.
Chief secretary to the Treasury, Danny Alexander, said: "The government is clear that aggressive tax avoidance is totally unacceptable. That’s why we are closing loopholes, bringing in a new General Anti-Abuse rule, and investing hundreds of millions of pounds in additional funding to help HMRC clamp down. These new rules are another significant tool as they will enable Government departments to say no to firms bidding for Government contracts where they have been involved in failed tax avoidance.”
There has been criticism of IT suppliers, including Capgemini and Accenture, and allegations that they aggressively minimise their tax bills. But suppliers claim they pay their tax as specified in the taxation rules.
Accenture, for example, denies that it is doing anything to aggressively avoid tax.
"Accenture reports all of its revenues earned within the UK and pays taxes on the profits earned within the UK. We take our responsibilities as a UK taxpayer seriously and pay tax on our UK profits as required by UK laws. Not only does our tax structure comply with UK tax law, but we take a conservative view of the tax law. We are confident that our tax filings are compliant, transparent and appropriate," said an Accenture spokesman.
Computer Weekly disclosed that CSC paid just 0.5% tax on £1.5bn income earned from a 10-year outsourcing deal with Royal Mail signed in 2003.