Public Accounts Committee releases report on “Tax avoidance: the role of large accountancy firms”

The Public Accounts Committee has today published its report: “Tax avoidance: the role of large accountancy firms”. There are a number of issues highlighted by the report that have made headlines: firstly, the "cosy" relationship between the government and the Big Four accounting firms, and the conflict this presents between creating policy and advising clients how to circumvent the rules; and secondly, the award of government contracts to those firms that promote aggressive avoidance.

Mazars Head of Tax, Tim Davies commented: "Mazars is pleased to have been able to contribute to this debate by giving evidence to the sub-committee. We believe that the tax strategies of multinationals that have agitated public opinion in recent months are primarily a matter of policy rather than imposed moral obligation. We are also pleased to see that "independence" and "trust" continue to take on greater levels of importance in the wake of the financial crisis and that these are now being applied in the area of tax. I have been talking to a number of large and listed businesses recently who are concerned about this issue and are looking to firms like Mazars who can offer tax services with global coverage as well as quality independent advice.”

He added: “We agree with the recommendations in today's report to put more energy into simplifying the UK tax system and that conflicts of interest of the largest firms should be more transparent. However, we think that there should be more focus on clarity of UK tax policy and distinguishing between avoidance and evasion rather than different shades of avoidance or acceptable planning. We also believe it is down to each company or individual to determine its tax strategy within the UK rules rather than to have an imposed moral standard. It would also be helpful for stakeholders to understand the overall tax contribution of businesses to the UK economy and not just the corporation tax that is paid."