The announcement on tax avoidance and government procurement made today includes an interesting paragraph that says a company bidding for a contract has to disclose when bidding for a government contract worth more than £2 million:
A failed avoidance scheme which the supplier was involved in and which was, or should have been, notified under the Disclosure of Tax Avoidance Scheme (DOTAS) rules.
Now we know that the Big 4 accountants have all filed DOTAS disclosures. Some of those schemes have failed.
Will this block them, and many big forms of lawyers as well, from government contracts?
I think this the acid test for this rule.
But I'm not holding my breath.
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Given the degree of corporate capture of the current government and departments of state I doubt whether this announcement has been made without several months of behind the scenes discussion with the relevant puppet masters, Richard.So I expect all the various measures are in place – or will be – to ensure none of the big four – or indeed the likes of Capita, G4S, or any other significant player is hit. We shall see.
My soundings suggest discussion has not taken place and they all hate this
I think you’ll be disappointed.
For rules due to apply from less than 2 months away, this is very sketchy. How does it apply to groups and overseas entities, for starters? And it seems to have a very subjective “you can pass them if they have a good explanation” rule, which either draws the teeth entirely or else makes it very hard to rehabilitate yourself if a past FD tried it on a few years ago. Or both. How will a procurement person know if your explanation is good or not, anyway?
I can’t believe this will touch the real rogues. But it will be a good stick to beat the governemnt with when they fail to deliver.
What about all those financial institutions that have built entire industries around tax avoidance? Why miss them out? Think of the billions more tax we could have raised to help the poor by not letting the middle classes have their tax perks. The poor don’t have the wealth that allows them to benefit from life assurance, pensions and ISAs. If we want to help the poor why let the middle classes off? Or are we just concentrating on the rich?