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He praised the work already done by HMRC in raising extra taxes by clamping down on non-compliant activcities, then delivered a warning that he intends to introduce further measures - and the way private companies contract with Government is on the agenda.
The scandal during the past year which exposed senior Government workers, including Head of Student Loans Company, Ed Lester, operating through their own limited companies to avoid tax and NIC has clearly left its mark on the powers-that-be at the Treasury who feel not only do they have to clean up their own act, but have to be seen trying to set the standards for everyone else.
Scandalous
Mr Alexander reminded Conference of the instructions which had been sent across Government demanding that Departments pay due diligence to the tax affairs of freelancers when contracting with them or renewing existing contracts. (See: HMRC's business tests at heart of new rules for contractors - Shout99, Sept 2012)
He said: "In the summer, I shut down the scandalous situation where thousands of public sector workers were being paid in a way that potentially allowed them to pay too little tax.
"Rules are now in place to stop that happening – based on the simple principle that if you’re being paid public money, you should pay your taxes."
Tax dodgers
He then issued a thinly-disguised warning that the Government would be looking to extend this practice to private sector companies who want to contract with the Government.
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"There are thousands of large firms that receive taxpayers’ money to deliver a service – they do a good job helping to deliver public services. But I have discovered that there is nothing that prevents the very small minority of firms that don’t play by the rules from winning Government contracts.
"That is not right. That is not fair. And I am determined that it comes to an end. If you want to work for us, you should play by our rules. Taxpayers’ money should not be funding tax dodgers. So I have tasked HMRC and the Cabinet Office to come up with a workable solution to this problem and we will set out more details later this year."
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Susie Hughes © Shout99 2012
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