50 signatures reached
To: To John Pollard, Leader of Cornwall Council and all Cornwall Councillors
Cornwall Council: Please ask questions about Tax Avoidance when contracting out services
Please go beyond the Pre Qualification Questionnaire and include tougher tax compliant questions as part of your procurement procedures. These are set out in Policy Procurement Note 03/14 which you can see in Appendix 1 of Christian Aid Sourced Guide
Why is this important?
‘At a time when councils are struggling with ever deeper cuts to our budgets, it makes sense that we use our spending power to favour companies that pay their taxes. After all, it is companies’ and individuals’ tax payments that ultimately fund council budgets. I hope that councils across the UK will agree – and adopt policies similar to Oxford City Council’s.’ Jean Fooks, Councillor for Summertown Ward, Oxford
According to Christian Aid’s Sourced campaign Councils spend billions of pounds each year on goods and services. This puts them in a powerful position to insist on minimum ethical standards from the companies that they do business with. calls on local councils to introduce tougher questions about tax compliance when they buy goods and services from private companies.
HMRC calculated in 2013 that the UK itself is losing in the region of £30bn, of which £9bn was estimated to be unpaid tax by big businesses[i]. However the official figure is likely to be conservative and a separate estimate by tax expert Richard Murphy puts tax avoidance(legal) at £19.1bn for 2013/14 [ii]– the amount pencilled in for cuts to our schools, hospitals and other services over the next four years[iii].
This figure is separate from tax debt of £18.2 and the still larger figure of £82.1 for tax evasion (illegal).
Tax avoidance and evasion by big multinational companies also hurts local small and medium-sized companies that pay more tax proportionately. This means they cannot compete on a level playing field with multinational companies.
The harmful impacts of tax avoidance and tax evasion are found not just in the UK. Christian Aid has highlighted the damaging effect of corporate tax evasion and avoidance on the world’s poorest countries. Tax dodging is costing these countries up to US$300bn each year – far more than they receive in aid.
Case study: Experian is used by the majority of UK local authorities to provide information, data collection and analysis,15 especially for detecting cases of fraud. 50% of Experian’s subsidiary companies are based in tax havens,16 including Costa Rica,17 Delaware (USA), Ireland and Jersey[iv]
[i] Measuring tax gaps, 2013 edition: Tax gap estimates for 2011-12, HM Revenue & Customs, 2013, p4,www.gov.uk/government/uploads/system/uploads/attachment_data/file/249537/131010_Measuring_Tax_Gaps_ACCESS_2013.pdf
[ii] Tax Research UK 2014 : The Tax Gap
[iii] Guardian 18-Jan-2016: The Cayman Islands – home to 100,000 companies and the £8.50 packet of fish fingers
[iv] Christian Aid Campaign Sourced