Medway Council is one of over 60 Fair Tax Councils in the UK. This means we are committed to responsible tax conduct and raising awareness of it.
We continue to use good practices when handling our own taxes.
We also encourage other organisations to do the right thing with their tax affairs. We expect financial transparency from suppliers. For example, when awarding contracts we consider:
- how they pay their tax
- their ethics
- value for money
- the quality of services they provide.
Our tax resolutions
In declaring ourselves a Fair Tax council, we agreed 10 resolutions. These have already been embedded in our day to day business or we're in the process of doing so.
The resolutions are:
Approve the 'Councils for Fair Tax Declaration' led by the Fair Tax Foundation
We approved our support for the declaration at Full Council in July 2023.
Find out more about the Councils for Fair Tax Declaration.
Lead by example and demonstrate good practice in our tax conduct
We access regular briefings, training and advisory services through our contract with specialist public sector tax advisors, PS Tax. This helps us make sure our activities are in line with the latest requirements and guidance.
We train staff to make sure we account for VAT properly on every transaction.
Our payroll systems and processes are well designed and maintained. This ensures we deduct and pay the appropriate sums of tax for all our employees and members.
We do not use any in-house strategies to reduce our property tax liabilities. This includes Business Rates.
Ensure tax legislation (IR35) is implemented robustly and contract workers pay a fair share of employment taxes
In 2024 our Internal Audit Team conducted a full audit of our IR35 processes. This was to ensure we are robust in our administration and remain compliant with all HMRC requirements. For example, making sure our locum staff are paying the required rates of tax.
The audit identified five areas for improvement to better safeguard the organisation:
- full review of our intranet pages to ensure recruiting managers are aware of up-to-date guidance
- access via our intranet to the HMRC online assessment tool for recruiting managers
- a process to prevent reinstatement of an interim or temporary worker (unless accompanied by confirmation from the Temporary Recruitment team or Category Management team)
- introducing regular sample checking of new workers to ensure that the HMRC online assessment tool has been completed correctly
- a process to regularly check that a new assessment is completed if a work role changes.
We produced a plan to put these actions into place. The Audit Committee has signed off these actions as complete.
Not use offshore vehicles for buying land and property, especially where this leads to reduced payments of stamp duty
We have never used, and do not intend to use, offshore vehicles for buying land and property.
Ensure that not-for-profit structures are not being used inappropriately by suppliers to reduce the payment of tax and business rates
When bidders submit tenders to win contracts with us they must:
- disclose their own organisation structure details
- share details of any parties they will rely on to fulfil the contract
- declare they have met all obligations relating to taxes and social security contributions.
Demand clarity on the ultimate beneficial ownership of suppliers
We always find out immediate and ultimate parent company details if they exist.
We ask bidders to disclose their ultimate beneficial owners if they’re different from their legal ownership.
Promote Fair Tax Mark certification
This resolution was especially for any business we have a significant stake in and where corporation tax is due.
Corporation tax liability for our 100% council owned companies has been minor. We still aspire to get Fair Tax Mark certification for these companies over the next few years as they become more profitable.
Support Fair Tax Week events and celebrate responsible businesses
We are proud to promote businesses that:
- are responsible in their tax conduct
- pay their fair share of corporation tax.
In 2024 we published a press release and updated our website as part of Fair Tax Week. This raised awareness and signposted businesses to further information. We'll do the same in 2025.
Support calls for urgent reform of UK procurement law to enable local authorities to better penalise poor tax conduct and reward good tax conduct through procurement policies
We have termination conditions in our contracts. Not meeting tax obligations would be a breach of these conditions. This breach allows us to exit the contract without penalty.
The recent Procurement Act made no material difference to the way we encourage tax compliance from suppliers. We continue to support calls for urgent reform of UK procurement law to enable local authorities to better penalise poor tax conduct and reward good tax conduct.