Oldham Liberal Democrats say ‘It’s Time for Contractors to Pay Fair Share of Tax’

This week is Fair Tax Week (6 to 14 July) and Liberal Democrat Councillor Chris Gloster is using the occasion to propose a motion at the next meeting of Oldham Council (10 July) calling for the Council to sign the Fair Tax Declaration.  The declaration is a call for action on corporate tax avoidance, making contractors who supply goods and services to public authorities pay their fair share of tax. Councillor Gloster is backed by his colleague, Louie Hamblett, Councillor for Crompton.

Chris, as the Council’s Shadow Cabinet Member for Finance, is a strong believer that businesses should act responsibly and pay their fair share of tax to finance public services.  Chris said:  “Corporate tax, like personal income tax, funds the essential public services like health, education, policing, social care and highway maintenance we all rely upon.  Polling from the Institute for Business Ethics found that corporate tax avoidance has in recent years been the primary concern of the British public when it comes to business conduct.  Taxpayers who make their own contribution rightly expect contractors to also pay their fair share in funding public services.”

Tax losses from just one form of tax avoidance, multinational profit-shifting, could be costing the UK some £7bn per annum in lost corporation tax revenues. Consequently, six in ten people feel that public authorities should pay attention to the tax position of any companies with which they engage as an important part of awarding a contract.

Chris added:  “Local councils receive and spend a great deal of public money.  Much of this money is spent on buying goods and services from private-sector contractors.  It is therefore imperative upon us to show good faith with the public by ensuring we only work with contractors who play fair by tax.  Some councils have also made investments in companies with a history of tax avoidance or purchases of commercial property from organisations based in tax havens.  We should demonstrate our commitment to exemplary tax conduct by refusing to go along with tax dodging in our investments or when buying land and property.  Signing this declaration and making these commitments real will show that Oldham Council supports international tax justice.

Oldham Council 10 July 2019 – Notice of Opposition Business – Adopting the Fair Tax Declaration

Council notes that:

  • The 6 – 14 July 2019 is Fair Tax Week 2019.
  • 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.

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