In February HM Revenue and Customs issued a discussion document and draft guidance on using proper payment of tax liabilities as a selection criteria. This follows the wide public debate on corporate tax avoidance and evasion. The EU Procurement Directive and the Public Contracts Regulations 2006 allow contracting authorities to apply tax and propriety based criteria at the selection stage. In particular, bidders can be asked whether they have fulfilled all its obligations relating to the payment of taxes.

The Government is proposing to set out new guidance, requiring potential suppliers to confirm their tax compliance as part of the procurement process. The new guidance is seen as "compatible with the existing procurement process, providing a useable framework to ensure that procuring departments are able to apply it consistently and fairly". Under the new policy, from 1 April 2013 potential suppliers to central government will have to self-certify, as part of the selection stage of above-threshold procurements, their recent tax compliance history.

In addition, Contracting Authorities will ensure contractual documentation contains a standard clause enabling them to terminate a contract, at their discretion, if a supplier has a history of non compliance. It also places a contractual obligation on the supplier to keep the Contracting Authority notified of changes in relation to tax compliance. Failure to do this will also trigger remedies including, potentially, termination of the contract.