PRESS RELEASE : Council could ask for new powers to snub tax-avoiding companies [October 2022]

The press release issued by Adur and Worthing Borough Council on 14 October 2022.

Businesses that legally avoid paying tax could be banned from winning Council contracts if the Government changed the rules, a report argues.

A motion to be discussed by Worthing Borough Council calls on the Government to help it combat corporate tax avoidance and stamp out corruption in business by lifting local authority purchasing restrictions.

Data from the Institute for Business Ethics suggests that since 2013, corporate tax avoidance has been the top concern of the British public when it comes to business conduct.

Although current government rules allow councils to exclude supplier businesses for proven tax offences, the grounds for exclusion are fairly narrow and, in reality, rarely come into practice. The current restrictions also prevent the Council from specifying “responsible tax conduct” as a criteria which a business must meet to be awarded a contract.

In response to these concerns, the Council will next week consider a fair tax motion involving an appeal to the Government to strengthen efforts to combat corporate tax avoidance, ensure fair competition for UK businesses small and large, and bolster efforts to drive out corruption.

If agreed, the motion would also see the Council ask the Government for the power to require potential suppliers to prove they are of “responsible tax conduct” before they consider awarding them contracts. The Council would also be better able to refuse to engage in off-shore dealings when buying land and property, and could take action to ensure its contractors are paying tax properly.

Cllr Jon Roser, who is proposing the motion, said:

“Paying tax is often talked about as if it’s a burden – and it really shouldn’t be. Taxation helps to fund an array of vital public services, from education, health and social care to policing and defence. It helps to counter inequalities, and finances public spaces that everyone can benefit from.

“Looking to the current cost of living crisis, it’s more significant than ever that we hold businesses to account and ensure that they’re paying their fair share. As a Council we should be leading by example, committing to transparency in our own taxes whilst calling on the Government to help us take action and ensure that businesses are acting fairly.”

The fair tax motion will be proposed at a meeting of Worthing’s Full Council on Tuesday (18th October 2022).