Procurement policy note 03/14: promoting tax compliance · first published 7 February 2014
This Procurement Policy Note (PPN) sets out rules requiring suppliers to self-certify their tax compliance when bidding for central government contracts worth more than £5 million. The policy has applied since 1 April 2013 and affects all central government contracts above that threshold. Buyers assess suppliers' self-certification responses at the selection stage, and the guidance includes contract clauses departments must use. The PPN is currently being updated to reflect the Public Contracts Regulations 2015 — until a new PPN is issued, any buyer intending to use this guidance to make a selection decision must first consult the Crown Commercial Service (CCS). For most small businesses, the £5 million threshold means this will only apply to a minority of bids, but if you are pursuing a contract at or above that value, you must be prepared to self-certify your tax position.
WHO THIS APPLIES TO
THE ENKII VIEW
The self-certification requirement is a potential exclusion gate: if your firm has unresolved tax compliance issues, you could be ruled out at selection before your technical or commercial offer is even considered. For well-run SMEs with clean tax records, this is low-risk but requires deliberate preparation — you need to be able to evidence your position clearly and quickly. The interim status of the guidance (pending a new PPN under the Public Contracts Regulations 2015) means buyers must check with CCS before applying it, which could create delays in high-value procurements you are bidding for.
1. Prepare a clear, up-to-date self-certification of your tax compliance before submitting a bid — check with your accountant or tax adviser that your HMRC (His Majesty's Revenue and Customs) affairs are in order and that you can honestly certify compliance.
SMEs bidding for central government contracts over £5 million — The policy requires suppliers to self-certify tax compliance at the selection stage; an inability to do so can exclude you before your bid is assessed on merit.
2. If you receive a procurement questionnaire that includes a tax compliance self-certification section, answer it carefully and honestly — do not leave it blank or treat it as a formality.
SMEs bidding for central government contracts over £5 million — Departments are required to assess suppliers' responses and the guidance includes specific assessment criteria (Annex A of the PPN); incomplete or unsatisfactory answers could result in disqualification.
3. If you have any historic or ongoing tax disputes with HMRC, take legal or tax advice before bidding and understand how to disclose these accurately in your self-certification.
SMEs bidding for central government contracts over £5 million — Undisclosed or misrepresented tax compliance issues risk exclusion at selection and potential contract termination via the new contract clauses departments are required to include.
4. Watch for a new PPN that will replace PPN 03/14 under the Public Contracts Regulations 2015 — the rules may change in detail when it is issued.
All SMEs monitoring procurement policy — The document explicitly states the guidance is being updated and a new PPN will be issued; the replacement note may alter scope, thresholds or self-certification requirements.
Every rule below quotes the official document verbatim.
The tax compliance policy applies to all central government contracts of more than £5 million. (Central government contracts over £5 million, from 1 April 2013.)
“This applies with effect from 1 April 2013 to all central government contracts of more than £5 million.”
Suppliers bidding for in-scope contracts must self-certify their tax compliance. (Central government contracts over £5 million, from 1 April 2013.)
“Suppliers bidding for these government contracts must self-certify their tax compliance.”
This PPN replaces Action Note 06/13 dated 25 July 2013. (Central government, all in-scope contracts.)
“This Action Note replaces Action Note 06/13 dated 25 July 2013.”
The guidance is being updated for the Public Contracts Regulations 2015; buyers must consult the Crown Commercial Service before using it to make a selection decision in the interim. (Central government buyers, current interim period pending updated PPN.)
“Until a new PPN is issued, any organisations intending to take a selection decision using this guidance should consult beforehand with the Crown Commercial Service by contacting the helpdesk on 0345 410 2222 or emailing info@crowncommercial.gov.uk.”
Departments must assess suppliers' self-certification responses and include new tax compliance clauses in contract terms, as set out in Annex A of the PPN. (Central government contracting authorities, contracts over £5 million.)
“provides further detailed guidance at Annex A on how departments should assess suppliers' responses and including new clauses in contract terms.”
This briefing is enkii's interpretation of the official document — the official text always governs.
Source document © Crown copyright, reused under the Open Government Licence v3.0 via the GOV.UK Content API. enkii tracks every Procurement Policy Note and briefs changes the day they land — see all briefings.