The Public Accounts Committee (PAC) have recommended that outside accountants be stopped from working within government, in order to prevent them from telling clients about tax loopholes.
In its report on tax avoidance, PAC has criticised accountancy firms for using their position as advisers on tax law as an opportunity to discover insider government knowledge for the benefit of their clients.
The committee also calls for a ban on firms working for the public sector if they’ve been selling tax avoidance schemes, which represents a ‘ridiculous conflict of interest’ according to committee chairwoman Margaret Hodge.
The Big Four came in for particular criticism for wielding ‘undue influence’ on the tax system. Hodge stated: ‘…accountancy firms and lawyers and companies themselves take advantage of perfectly legitimate intentions of the government and use them to avoid tax’.
Tax advisers rejected the claims. Kevin Nicholson, head of tax at PwC responded: ‘We strongly disagree with the PAC’s conclusions about the role of large accountancy firms which seem to be based on a misunderstanding both fo what we do and how we do it’.
Read more about the Public Accounts Committee in the news.

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