In the Budget, the government confirmed that the new public sector procurement rules would come into force from 1 April 2013 but would not be retrospective.
In a summary of consultation responses issued on 20 March, there is confirmation that suppliers would only be required to certify where an occasion of non-compliance occurs on or after 1 April 2013, and for tax returns submitted on or after 1 October 2012.
The severity of the original plans has also been diluted and the government has reduced the ten-year look-back period to six years, whereby companies have to demonstrate that they have not been involved in any questionable tax avoidance practices.
The threshold level for contracts will be set at £5m to avoid capturing small business suppliers and increasing administrative costs for low-cost contractors.
Foreign economic operators bidding for UK central government contracts will be required to self-certify their tax compliance against the equivalent tax rules, where these exist.
Gary Richards, corporate tax partner at law firm Berwin Leighton Paisner said: 'The revisions will iron out a whole series of problems by limiting the scope of the rules to bidding companies or consortia, not the whole of a worldwide group, and will not be retrospective nor require them to certify compliance for their supply chain.
'These are far more workable and look like the government has been listening to industry.'
The government will review the policy within a year to ensure that it is meeting the avoidance objectives.
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