Wednesday August 24th 2022
Midlothian Council has agreed to support the Councils for Fair Tax Declaration, a UK-wide initiative aimed at encouraging responsible tax practice.
A motion approved by councillors on yesterday pointed out that although paying tax is often presented as a burden, it enables governments and councils to provide vital services ranging from education, health and social care, to flood defences, roads, policing and defence.
“As recipients of significant public funding, local authorities should take the lead in the promotion of exemplary tax conduct,” states the council motion. This means “ensuring contractors are paying their proper share of tax, or by refusing to go along with offshore tax dodging when buying land and property.”
According to the Fair Tax Foundation, around 15% of public contracts in Scotland have been won by companies with links to tax havens. It is estimated that losses from multinational profit-shifting alone could be costing the UK some £17bn a year in lost corporation tax income.
Recent polling has also found that two thirds of people believe that government and local councils should at least consider a company’s ethics and how they pay their tax, as well as the value for money and quality of service provided, when awarding contracts to companies.
In signing up for the declaration, Midlothian Council has agreed to join with other local authorities in demonstrating good practice in tax conduct, across its activities. This includes ensuring, where practical, that contractors pay a fair share of employment taxes, and do not use offshore vehicles for the purchase of land and property.
The Council is committed to discouraging the use of not-for-profit structures where these are used inappropriately as an artificial device to reduce the payment of tax and business rates. It will support calls for urgent reform of the law to enable local authorities to better penalise poor tax conduct and reward good tax conduct through their procurement policies.
The council has also agreed to promote the Fair Tax Mark certification, especially for any business in which they have a significant stake and where corporation tax is due.
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