The recent Fair Tax Week allowed companies who are recognised for good practice in tax conduct to celebrate this fact. It also provided the opportunity for us to call on all companies, including councils, to sign up to be open, transparent and fair in their tax dealings.
The council motion below is an example of how Liberal Democrat council groups can keep up the pressure on both councils and companies to achieve these standards.
Council motion – Adopting the fair tax declaration
Council notes that:
- The 6 – 14 July 2019 was Fair Tax Week.
- Polling by the Institute for Business Ethics finds that corporate tax avoidance has, since 2013, been the clear number one concern of the British public in relation to business conduct.
- It has been conservatively estimated that losses through just one form of tax avoidance, multinational profit-shifting, could be costing the UK some £7bn per annum in lost corporation tax revenues.
- An estimated 15% of public contracts have been won by companies with links to tax havens.
- 6 in 10 members of the public believe that UK Government and Councils should examine the tax practices of such prospective contractors as part of the procurement process.
- The Fair Tax Mark offers a means for businesses to demonstrate good tax conduct.
Council believes that, as a publicly-funded body and a major procurer of goods and services, it should demonstrate good tax conduct.
Council, therefore, resolves to sign the Councils for Fair Tax Declaration, and furthermore to lead by example and demonstrate good practice in our tax conduct, right across our activities, by:
- Ensuring contractors implement IR35 robustly and pay any due employment taxes.
- Shunning the use of offshore vehicles for the purchase of land and property, especially where this leads to reduced payments of stamp duty.
- Undertaking due diligence to ensure that not-for-profit structures are not being used inappropriately as an artificial device to reduce the payment of tax and business rates.
- Ensuring that there is clarity on the ultimate beneficial ownership of suppliers and their consolidated profit & loss position, given that a lack of clarity could be strong indicators of poor financial probity and weak financial standing.
- Promoting Fair Tax Mark certification to local businesses, our contractors and in any business in which we have a significant stake and where corporation tax is due.
- Supporting local Fair Tax Week events and celebrating the tax contribution made by responsible businesses.
- Supporting calls for urgent reform of EU and UK law to enable municipalities to revise their procurement policies and better penalise poor tax conduct and reward good tax conduct.