Government plans to introduce new rules on tax compliance for companies tendering for public contracts have come under fire for lacking clarity and potentially discriminating unfairly against UK suppliers.

The rules will only apply to new contracts offered for tender from 1 April 2013, but the current proposals suggest that historical compliance failures will be taken into account.

Mary Monfries, head of tax policy and regulation at PwC, said: 'We are concerned that the new procurement rules are to apply retrospectively, with a ten-year period proposed. The tax environment has changed considerably over the last ten years and the focus should be on current and future behaviour.'

Bill Dodwell, head of tax policy at Deloitte, said: The problem area for some will be activities in the past, when perhaps a different environment existed. It may also be challenging for the government to exercise its judgment where there has been an occasion of non-compliance.'

Jason Collins, head of tax at Pinsent Masons pointed out that the proposals also say 'mitigating' factors should allow some companies to be exempted from the ban, but do not define the 'mitigating' circumstances. He said the proposals 'give too much influence to bureaucrats'.

'Without clarification, these proposals will act as a deterrent to negotiation and settlement with HMRC,' said Collins. 'A large corporate in a dispute with HMRC may well choose to challenge HMRC's interpretation of tax rules, rather than settle and potentially face a procurement ban.'

There are also concerns that the new rules may unfairly discriminate against UK suppliers who are required to comply with a tougher tax regime than foreign-based competitors.

Monfries said: 'Although the government says it will look at equivalent foreign tax rules when reviewing overseas suppliers, the rules are not directly comparable. Long standing UK based companies who have responded to the public concerns could be put at a disadvantage against overseas new entrants.'

Her view is shared by Jane McCormick, head of tax at KPMG who said the proposals had the potential to create an 'unlevel playing field'.

McCormick said British-based companies could be put at a disadvantage because suppliers with tax obligations in foreign jurisdictions will be required to certify that there has not been an 'occasion of non-compliance' in relation to the equivalent foreign tax rules.

McCormick said: 'So whether or not there has been such an occasion will clearly rest on the rules pertaining to the various territories which are not uniform from country to country. Specifically, many countries do not have a General Anti-Avoidance/Abuse Rule (GAAR) or a disclosure of tax avoidance schemes (DOTAS) regime.

'Assessing the full impact of the proposals is difficult at this stage as it is very early days and increased clarity in certain areas is needed. There is a short consultation process on the proposals running from now until the end of the month and we would encourage all businesses engaged in or bidding for government contracts to pay close attention to today's proposals and participate fully in the consultation process.'

The consultation period closes on 28 February 2013.