London council targets tax-dodging contractors

TAX-EVADING companies could lose major council contracts under new rules adopted a north London borough.

Islington’s new standard contract conditions include specific rights allowing the authority to sever deals worth more than £5m in instances where contractors have not met their tax obligations.

Firms will be required to guarantee to inform the council, at the point of signing their contract, of any instances where they have not compiled with their obligations.

They will also be required to keep the council informed of tax compliance during the life of the contract.

In addition, Islington has agreed to review annually HMRC’s list of tax defaulters to identify any council contractors and, if necessary, terminate their contracts.

“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,” said Mike Curtis, Islington Council’s director of resources.

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