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accountancy firms defend tax advice in parliament

The heads of the UK's big four accountancy firm tax teams have been grilled by parliament’s influential Public Accounts Committee (PAC) on the use of tax avoidance.

accountancy firms defend tax advice in parliament

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The PAC committee members were highly critical of the big four’s “inappropriately” close working relationship with government departments, their presence in virtually all the world’s tax havens, their generic tax planning advice and the unfair “David and Goliath battle” between the firms and HM Revenue & Customs, according to media reports.

Under the spotlight yesterday were KPMG’s head of tax, Jane McCormick; Bill Dodwell, head of tax policy at Deloitte; PwC head of tax, Kevin Nicholson; and Ernst & Young’s tax head, John Dixon.

Member of parliament Margaret Hodge, who chairs the public accounts committee, was reported to have said that she was “shocked” to hear claims from a PwC employee that tax products will be approved if there is just a one in four chance of it being cleared by HMRC.

“That means you are knowingly marketing these schemes to clients when you’ve judged that there is a 75% risk of it being deemed unlawful,” she said. PwC’s Nicholson said he “did not recognise” the practice.

The four accountants rejected the idea that they made more money from tax advice than other parts of their businesses, and insisted that their advice follows the law and the informed wishes of their clients.

KPMG’s Jane McCormick said there was “no appetite” among customers to create tax schemes outside the law.

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