Making lucrative business out of designing and selling ways to avoid tax
THE British Public Accounts Committee Chairman has come down heavily on the Big Four and other agencies cheating the tax department.
She says that the Committee was able to shine a light on the unacceptable practices and sheer lengths that some companies go to in order to avoid paying the appropriate amount of tax on the profits they make from their activity here in the UK.
She did not mince words or names when she said,
"Our hearings with companies such as Google, Starbucks and Amazon have exposed the artificial structures and complex transactions used to move profits out of the UK into low tax jurisdictions.
Our hearings with the 'big 4' accountancy firms and promoters of marketed avoidance schemes have exposed a tax avoidance industry, comprising many large accountancy firms, tax advisers and lawyers, all of whom are making lucrative business out of designing and selling ways for their clients to avoid tax.
Some of these firms, for example PwC from whom we took evidence, appear to be selling these schemes on an industrial scale."
Interesting quotes from the eminently readable report:
We remain concerned that HMRC's relationship with these large accountancy firms is too cosy, and it needs to get much tougher in challenging the advice they give to their clients.
We do not believe there are enough prosecutions for tax evasion to act as an effective deterrent to those who break the law. As it stands, tax avoidance - and even evasion - can be a risk worth taking.
HMRC needs to show that it comes down hard on tax cheats and change the perception that it is far too tolerant of these companies and individuals - in contrast to its treatment of small businesses and the majority of the public who pay their taxes.
For as long as the United Kingdom has such a complex tax code, opportunities for aggressive tax avoidance and evasion will continue to be exploited.
The complexity of tax law and the constraints on HMRC's resources mean that it is fighting an uphill battle against those who are determined to cheat the tax system.