Large accounting firms have avoided a crackdown on advising companies and individuals with a history of breaking tax rules bidding for government contracts.
Under new proposals from 1 April companies will have to make a declaration about their tax activities if they bid for contracts worth more than £2m.
However a Treasury spokesperson told AccountingWEB that the new guidance relates directly to companies that are bidding for government contracts, not to their advisers.
"It will apply to any firm bidding for government contracts, but only to their own tax affairs, not to any advice they are giving other people or companies," the spokesperson said.
The rules are outlined in draft guidance published for consultation by the government.
Under the new regime, designed to accommodate EU rules, potential suppliers will be forced to disclose any occasion in the past decade when they have not complied with tax rules.
Combined with the introduction of a general anti-abuse rule coming in in April, agencies will have the power to refuse contracts on the grounds a company has engaged in “aggressive” or “highly artificial” tax avoidance schemes.
They will have to tell the department if any tax return has recently been found to be incorrect as a result of: