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UK lawmakers criticise accountants over tax

Friday, April 26, 2013 - 02:22

April 26 - With corporate tax avoidance high on Britain's political agenda, a committee of UK parliamentarians has criticised accounting firms for helping big companies avoid tax. As Joanna Partridge reports, there's also concern over the way staff from the 'Big Four' accounting firms are seconded to government to help draft tax rules.

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First big firms like Starbucks, Amazon and Google came under fire from politicians over the amount of tax they pay in the UK. Now lawmakers have criticised the role of accounting firms in helping companies avoid tax. Corporate tax avoidance has been at the top of the political agenda in Britain over the past year, after reports showed some major companies paid little or no tax, by shifting profits to tax havens. The bosses of some of those firms were even called to speak to British MPs in late 2012. A new report from the Public Accounts Committee accused the four biggest accounting firms - PriceWaterhouseCoopers, KPMG, Deloitte and Ernst & Young - of "devising complex schemes which look artificial". It also says the accounting firms would still recommend tax arrangements which had only a 50% chance of being successful in court. The "Big Four" say they no longer advise on aggressive tax avoidance plans. Margaret Hodge chairs the committee - and is concerned about how staff from these firms are seconded to government. SOUNDBITE: Margaret Hodge, Chair of the Public Accounts Committee, saying (English): "What's particularly galling is when individuals in these big firms come in, advise the government on how to write a new tax law, then use that law as an opportunity for tax avoidance when they go back into their firm. Poacher turned gamekeeper turned poacher is simply not on and has to stop." Treasury Minister David Gauke doesn't agree. SOUNDBITE: David Gauke, Treasury Minister, saying (English): "It would be absurd for a government not to engage with those people who have a practical understanding of how tax would work in practice." The accounting firms say they've behaved ethically and complex laws are to blame if it appeared otherwise. Independent retailers in the UK complain they can't compete with big firms. Robert Oxley from the Taxpayers' Alliance wants the government to simplify - and reform - the tax system. SOUNDBITE: Robert Oxley, Campaign Manager, Taxpayers' Alliance, saying (English): "So many people question about whether companies are paying their fair share, because we have this bureaucratic, burdensome behemoth which is weighing down businesses, and those with the right accountants, the right lawyers, can work their way around it." The government has called on companies to disclose more information about their tax affairs - but this would be purely voluntary. Ordinary taxpayers might be keener for the government to make this mandatory.

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UK lawmakers criticise accountants over tax

Friday, April 26, 2013 - 02:22