United Kingdom

Key Measure: Tax and Procurement 

KPMG Budget 2013

Description of Measure


HM Revenue & Customs (HMRC) have confirmed that from 1 April 2013 suppliers bidding  for central Government contracts over £5m will be required to self certify their tax compliance history. This will not be included in a Finance Bill – it is guidance to procurement teams of central government departments.


This will involve:


Identifying ‘occasions of non-compliance’


Being where a tax return of the supplier is found to be incorrect as a result of:


  • HMRC successfully taking action under the General Anti-Abuse Rule (GAAR) or the ‘Halifax abuse principle’; or
  • a scheme notified (or that should have been notified) under the Disclosure of Tax Avoidance Scheme (DOTAS) rules being proved to have failed; or
  • where the supplier’s tax affairs have given rise to a criminal conviction or penalties for civil fraud or evasion.


Certification is only required if the occasion of non-compliance occurs on or after 1 April 2013 and is in respect of tax returns submitted on or after 1 October 2012.


Look- back period


A six year time limit will apply from the date at which the occasion of non-compliance occurred.


‘Economic operator’


Self certification will only apply to the ‘economic operator’ (defined as ‘a contractor, a supplier or a services provider’ under UK Public Contract Regulations 2006) who will fulfil the contract and will not be extended to other group companies, subcontractors or companies in the supply chain.


Foreign suppliers will be required to self certify compliance against equivalent tax rules where these exist.


The Government will review the workings of the policy within a year and may, if necessary, make changes in the light of future behaviour of suppliers.


The changes announced in the Budget bring greater clarity and allow suppliers to get on with their business of proposing for contracts while the Government can ensure operators are playing by the rules.

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