In a bid to reduce legal tax avoidance methods amidst suppliers, the UK government is looking at plans to require that suppliers bidding for Whitehall contracts reveal their UK tax payments.

Suppliers who minimise their UK tax bills are expected to be prevented from bidding in the future for government contracts, in new rules that are rumoured to be introduced by Francis Maude during this week.

Currently companies including Capgemini and Accenture are among a large list of big name companies that have been criticised for paying low levels of corporate tax.

Despite the strong talk, many companies attacked for paying low tax, are paying a perfectly legal amount, with many ‘loopholes’ existing within law.

It may also prove difficult for the government to blacklist suppliers from a legal perspective, when no laws have been broken.

The alternative would be to reduce so called loopholes. Both methods could be expected to reduce the attractiveness of the UK as a major economic trading hub.