Cheshire East Council is to change its procurement rules in order to prevent tax evading and unscrupulous tax avoiding companies from securing contracts with the authority.
It follows a motion put to cabinet by ward members, who called on the council to adopt beefed-up central government rules on awarding contracts worth £5m or above.
A meeting of cabinet unanimously backed the motion, brought by Crewe ward member Councillor Steven Hogben and Sandbach ward member Councillor Sam Corcoran.
The decision means that, from January 1, 2017, all companies bidding for contracts of £5m or more will be required to self certify that they are ‘fully tax compliant’ in line with the UK government’s latest procurement rules.
Councillor Paul Findlow, cabinet member for corporate policy and legal services, said: “My cabinet colleagues and I wholeheartedly support this decision.
“This Council believes it is right that bidders for council contracts should be asked to
account fully for their past tax records, using the higher standards adopted by central government.
“Tax evasion and sharp-practice avoidance is simply wrong. This is about ensuring good practice and this council will not do business with those who seek to shirk their responsibilities at the expense of the taxpayer and the vast majority of responsible, tax-compliant companies.”
HMRC estimates that tax evasion costs the UK economy £4.4billion last year with a further £2.7bn lost due to ‘dubious’ tax avoidance
Cllr Corcoran added: “Aggressive tax avoidance is becoming socially unacceptable. I am pleased that no businesses that engage in such practices will be awarded large contracts by Cheshire East Council.
“Businesses and individuals should be proud to pay their fair share of the taxes that protect our nation, support the most vulnerable in society and provide for the services that we all use.”