Council clampdown on corporate tax evaders

Major council contractors in Islington that evade paying tax could see their contracts terminated under new rules adopted by the north London local authority. 

 

Islington Council’s new standard contract conditions include specific rights to allow contracts over the value of £5M to be severed in instances where contractors have not complied with their obligations to pay tax. 

 

The new contract conditions direct contractors to provide Islington Council with a guarantee obligating the contractor to inform the local authority – at the point of signing the contract – of any instances in which it has not fully complied with its tax obligations. 

 

Contractors will also be required to keep the council informed of their compliance with tax obligations during the length of the contract. 

 

Islington Council has agreed to review annually HMRC’s published list of tax defaulters, so as to identify any council contractors on this list and, if necessary, terminate contracts held with these companies using the new specific right to terminate the contract for breach of warranty or breach of duty to inform.

 

The north London local authority has written to its contracted organisations, reminding them of their tax responsibilities, including management and payment of taxes.  

 

Islington Council’s director of resources, Mike Curtis, said: “The council is committed to making Islington a fairer place. At a time when reduced funding for public services and rising living costs are making life harder for residents, it is right that we expect our contractors to pay their due share of taxation. 

 

“Where necessary, we will act swiftly to sever our connections with organisations that try to evade paying tax.”

 

Information about Islington Council’s contracts for goods, works, and services can be found here: https://www.islington.gov.uk/about-the-council/information-governance/freedom-of-information/popular-data/council-contracts.