Cabinet Office procurement policy notes on tax compliance

By Jenny Beresford-Jones

Under this new policy, in force since April 2013 but amplified by a new iteration in July 2013, bidders for government contracts valued at more than £5m must self-certify their tax compliance. If the supplier confesses to non-compliance (as defined), the contracting authority has the option to exclude that supplier from the procurement process (unless of course one of the mandatory exclusion criteria applies).

The new guidance from July of this year, which replaces that issued in April, provides more detail of how the policy should be implemented in practice. In particular, it includes guidance on how supplier responses on tax compliance should be assessed and what factors could sensibly be taken as mitigating circumstances. It also provides some example clauses for contact drafting.

The policy applies where the act of non-compliance by the supplier took place after 1 April 2013 and in respect of tax returns submitted from October 2012 onwards. It does not apply to call-off contracts made under framework agreements where the framework was set up before 1 April 2013, nor does it apply to extensions to existing contracts, where the original contract pre-dates 1 April 2013…

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