We recently reported on the new regime linking procurement by UK government departments to tax compliance by bidders. It applies from 1 April 2013 to contracts with a value of GBP 5 million or more with central Government departments, including their executive agencies and non-departmental public bodies and requires a bidder's tax compliance to be considered (among other things) in awarding the contract. Details of what this is likely to mean in practice, particularly in terms of tender and contractual documentation, have just been released in the form of instructions to Government departments.

The instructions contain (1) questions to be included at the selection stage in the pre-qualification questionnaire or invitation to tender concerning the bidder's their tax compliance history (for returns submitted on or after 1 October 2012) and (2) provisions that must be included in qualifying procurement contracts, such as an on-going obligation on the supplier to notify the department of any "occasion of tax non-compliance" (as defined) and the right for the department to terminate the contract if the supplier breaches its tax compliance obligations.

You can expect to see these new tax questions and clauses in procurement documentation from now on.