Government ‘must force its suppliers to pay tax’

The Government is failing to use its financial power to force suppliers to pay their fair share of tax on UK profits, a group of senior MPs has warned.

The Public Accounts Committee said ministers must use the muscle of government contracts to oblige companies to operate within the spirit rather than the letter of tax law. It also suggested that companies that had “botched” previous public sector contracts should be held to account when bidding for new work.

In a series of reports into efficiency across government, MPs suggested that senior civil servants were insufficiently accountable when large projects went wrong or over budget.

“If the public is to have confidence in the system for holding permanent secretaries accountable, the Government must be clear about the detail of what each permanent secretary is expected to achieve and how their performance will be assessed,” they conclude.