The Government confirmed in the Autumn Statement that it intended to consult informally on plans to devise a means to use the Government procurement process to encourage tax compliance from Government
The Government confirmed in the Autumn Statement that it intended to consult informally on plans to devise a means to use the Government procurement process to encourage tax compliance from Government suppliers. Under the original plans, any ‘occasion of non-compliance’ within a 10 year ‘look-back’ period would need to be declared and mitigating factors set out. Non-compliance would include:
(i) a tax return being found to be incorrect by reason of (a) the new General Anti-abuse Rule (b) any targeted anti-avoidance rule ("TAAR"), or (c) the Halifax abuse principle or
(ii) because the taxpayer was involved in a failed tax avoidance scheme to which the disclosure of tax avoidance schemes ("DOTAS") rules applied.
An informal consultation on the proposal ran from 14 to 28 February 2013. Despite the short length of the consultation process, over 50 responses were received. The Government has taken on board some of the criticisms levelled at the original plans.
Under the revised plans:
• The look-back period will be a maximum of 6 years, (i.e. referring to the date at which the ‘occasion of non-compliance’ occurred – generally the date the return was amended).
• Suppliers will be required to certify only where an occasion of non compliance occurs on or after 1 April 2013, and in respect of tax returns submitted on or after 1 October 2012.
• References to TAARs will be removed from the definition of "occasion of non-compliance".
• The supplier’s tax affairs having given rise to a criminal conviction for tax related offences which is unspent or to a penalty for civil fraud or evasion will be included in the definition of "occasion of non-compliance".
• Foreign economic operators bidding for UK central government contracts will be required to self-certify their tax compliance against the equivalent tax rules, where these exist.
(i) a tax return being found to be incorrect by reason of (a) the new General Anti-abuse Rule (b) any targeted anti-avoidance rule ("TAAR"), or (c) the Halifax abuse principle or
(ii) because the taxpayer was involved in a failed tax avoidance scheme to which the disclosure of tax avoidance schemes ("DOTAS") rules applied.
An informal consultation on the proposal ran from 14 to 28 February 2013. Despite the short length of the consultation process, over 50 responses were received. The Government has taken on board some of the criticisms levelled at the original plans.
Under the revised plans:
• The look-back period will be a maximum of 6 years, (i.e. referring to the date at which the ‘occasion of non-compliance’ occurred – generally the date the return was amended).
• Suppliers will be required to certify only where an occasion of non compliance occurs on or after 1 April 2013, and in respect of tax returns submitted on or after 1 October 2012.
• References to TAARs will be removed from the definition of "occasion of non-compliance".
• The supplier’s tax affairs having given rise to a criminal conviction for tax related offences which is unspent or to a penalty for civil fraud or evasion will be included in the definition of "occasion of non-compliance".
• Foreign economic operators bidding for UK central government contracts will be required to self-certify their tax compliance against the equivalent tax rules, where these exist.