The government is to use a six year old EU procurement directive to ban companies and individuals involved in failed tax avoidance schemes from securing public contracts.

The rules, which will come into effect in April 2013, require potential suppliers to disclose their recent tax compliance history, and specifically to reveal whether a tax return has recently been found to be incorrect as a result of a tax avoidance challenge or if there has been any involvement in a failed tax avoidance scheme.

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