UK big four accountants help rich avoid tax, MPs say

Britain’s leading accountancy firms use insider knowledge from the UK Treasury to help wealthy clients avoid taxes, a committee of UK parliamentarians has warned.

The Commons Public Accounts Committee said in a report on Friday that the big four firms, including Deloitte, Ernst and Young, KPMG, and PriceWaterhouseCoopers (PwC), second staff to the Treasury and later exploit loopholes in the country’s tax laws they helped to write.

In a 56-page expose titled “Tax avoidance: The role of large accountancy firms”, the committee also called for a ban on firms abusing their positions and described UK tax legislation as “hopelessly outdated”.

It is estimated that the accountancy giants make almost £2 billion annual profit helping companies cut their tax bills.

Labour MP and chairman of the committee, Margaret Hodge, expressed doubts about the firms’ “protestations of innocence”, as they claim their focus was on acceptable tax planning rather than aggressive tax avoidance.

“This is a ridiculous conflict of interest which should be banned in a code of conduct for tax advisers, as we have recommended to the Treasury and HM Revenue & Customs (HMRC),”she said.

Moreover, British MPs accused HMRC of having a “too cosy” relationship with the four accountancy giants.

“HMRC is not able to defend the public interest effectively when its resources are more limited than those enjoyed by the big four firms,” the report added.