Council approves Fair Tax Declaration

Midlothian Council has agreed to support the Councils for Fair Tax Declaration, a UK-wide initiative aimed at encouraging responsible tax practice.

Motion approved

A motion approved by councillors on Tuesday (23 August) 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.

Exemplary conduct

“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.”

Tax havens

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.

Ethics

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.

Good practice

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.

Contractors

This includes ensuring, where practical, that contractors pay a fair share of employment taxes, and not using offshore vehicles for the purchase of land and property.

Urgent reform

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.

Certification

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.