Fair tax bid rejected

Saturday 23rd October 2021 10:00 am
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Dealing with companies that practice tax avoidance is acceptable if it means getting a good deal for ratepayers, councillors in the Forest of Dean say.

A motion which called on the Forest of Dean District Council to support a fair tax declaration was rejected last week.

The idea was for the council to lead by example and demonstrate good practice in its tax conduct.

This included ensuring their contractors pay a fair share of employment taxes and that the council does not use offshore vehicles to buy land and property, especially where this would lead to reduced payments of stamp duty.

The motion also called for the council 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.

And also, to demand clarity on the ultimate beneficial ownership of suppliers and their consolidated profit and loss position when negotiating contracts worth more than £25,000.

But councillors were not convinced with the proposals which several saw as grandstanding by the Green Party and a move that would hinder the council.

Councillor Nicky Packer (Green, Newnham), who proposed the motion, said taxes need to be paid to fund local services.

She said her proposals would have little or no financial implications for the council.

"Tax seems like an inevitable burden but many companies operate in a way which allows them to pay little or no tax. This is unfair," she said.

"We should celebrate that this council is diligent in the way it operates.

"It should be acknowledged by being listed on the fair tax foundation website as a council supporting fair tax.

"We can raise awareness of fair tax and act as an example. We can encourage good tax practices by promoting the fair tax mark for companies opening in the district."

The council’s chief financial officer said there were no costs associated with signing up to the declaration.

But Councillor Richard Boyles (Con, Newnham) asked how the council would source its IT if it excluded companies which practice tax avoidance.

"We buy IT software from Microsoft or Apple," he said.

"Both of those companies avoid tax in Republic of Ireland. They pay just about the minimum lowest rate in the world.

"Who are we going to get our IT and software from?

Cllr James Bevan (Lydney East, Independent Alliance) said it was a nonsense motion and would tie the council up.

"It’s a competitive world out there in business," he said.

"You have to have value for money. If we are going to stop trading with some of these tax haven companies, it is really not an efficient way to do business.

"On a personal basis, are we not going to order anything off Amazon or buy anything through PayPal or Google?"

Councillor Philip Burford (Ind, Hartpury & Redmarley) said it would cost the council an absolute fortune if they try to take the moral high ground when the rest of the world doesn’t.

"All businesses are responsible to their shareholders, customers and clients to provide the best value for money," he said.

"Some people may call it tax avoidance; I think generally in the business community this is called tax planning or management."

And Cllr Harry Ives (Con, Lydney North) said tax avoidance is completely legal but arguably a moral issue.

"The most important factors that we should be considering when considering our contractors and suppliers is whether they are providing value for money, the best service to our council and residents and whether they are compliant by the law.

"The second you introduce a moral aspect to the process you are needlessly making it harder for businesses to work with us."

Cllr Sid Phelps (Green, Lydbrook) said he was alarmed at the reaction among councillors.

"I’ve heard quite a few people say that it is none of our business. Keep out of it, the only thing that matters here is the cost to our council taxpayers and morality doesn’t come into it.

"I absolutely disagree. It’s not about the cheapest rate. We shouldn’t just do the things because they are the cheapest for us."

The council passed an amended motion which asks officers to be as sure as they can be that they secure best value for money for goods and services within the scope of the law.

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