Sunderland Council backs call to shun tax dodgers

A call to shun tax dodgers has been backed by city leaders.

Sunderland City Council has agreed to back the Fair Tax Mark campaign, which urges local authorities to only do business with firms committed to paying their fair share of tax.

But bosses on Wearside stopped just short of formally signing up to the pledge, promising instead to ‘support the principles’ proposed.

“During the pandemic, we’ve seen the things tax pays for,” said Green councillor Dom Armstrong, who proposed the original motion.

“The NHS, teachers, the armed forces – it’s not smart to not pay your taxes, it’s actually pretty stupid.”

Coun Armstrong was speaking at this Wednesday’s meeting of the full city council, which was held by video link and broadcast via YouTube.

His original proposal had called for the council to ensure ‘not for profit’ arrangements were not abused by council contractors to avoid paying tax.

But an amendment by the ruling Labour Party group added this should only be done ‘where resources allow’ and deleted a commitment to ensure transparency over the ownership of companies doing work for the local authority.

Deputy council leader Paul Stewart insisted it was only a “technical amendment”.

He said: “[We] support the clear direction of this, in terms of doing what we can to take a position on tax evasion and tax avoidance.

“The general thrust of this motion, we are fully supportive of.”

Council leader Graeme Miller claimed the council’s resources were not sufficient to ‘do what the original motion set out, adding it was “not weakness, just practical behaviour”.

Coun Armstrong expressed his disappointment, but accepted it was a “starting point”.

Opposition Liberal Democrat leader Niall Hodson, who co-sponsored the motion with Coun Armstrong, was more critical however, accusing Labour of “watering down” the commitment.

He said: “The purpose of a motion like this is because we as councillors have the power to do things – this is words, rather than action.

“It’s a cowardly position to take and [the Liberal Democrats] will be voting against it.”

The Lib Dems voted against accepting the amendment, but offered no opposition in a subsequent vote on the final agreed version of the motion.

Sunderland City Council Fair Tax Declaration motion in full:

Council notes that:

  • Polling by the Institute for Business Ethics finds that corporate tax avoidance has, since 2013, been the clear number one concern of the British public in relation to business conduct.
  • It has been conservatively estimated that losses through just one form of tax avoidance, multinational profit-shifting, could be costing the UK some £7bn per annum in lost corporation tax revenues.
  • An estimated 15 per cent of public contracts have been won by companies with links to tax havens.
  • 6 in 10 members of the public believe that UK Government and councils should examine the tax practices of such prospective contractors as part of the procurement process.
  • The Fair Tax Mark offers a means for businesses to demonstrate good tax conduct.

Council believes that, as a publicly-funded body and a major procurer of goods and services, it should demonstrate good tax conduct.

Council, therefore, resolves to support the principles of the Councils for Fair Tax Declaration, and furthermore to lead by example and demonstrate good practice in our tax conduct, right across our activities, by:

  • Ensuring contractors implement IR35 robustly and pay any due employment taxes.
  • Shunning the use of offshore vehicles for the purchase of land and property by the council, especially where this leads to reduced payments of stamp duty.
  • Undertaking due diligence where resources allow to ensure that not-for-profit structures are not being used inappropriately as an artificial device to reduce the payment of tax and business rates.
  • Promoting Fair Tax Mark certification to local businesses, our contractors and in any business in which we have a significant stake and where corporation tax is due.
  • Supporting local Fair Tax Week events and celebrating the tax contribution made by responsible businesses.
  • Continuing to use Social Value measures including, where appropriate, prioritising local companies in our procurement.

Chronicle Live – Sunderland