• Register
Return to: Home > News > Tax > Big Four defend their work in front of UK govt accounts committee

Big Four defend their work in front of UK govt accounts committee

Representatives from the UK Big Four defended their role as tax advisors for companies which have successfully avoided paying little or no UK corporate tax, in front of the UK governments House of Commons (HOC) Public Accounts Committee.

The committee triggered its investigation following the revelation that companies such as Starbucks, Google and Amazon paid little or no tax in the UK, which caused public outcry.

In search for a solution to the problem the HOC has asked the Big Four to give their views and KPMG's head of tax, Jane McCormick, Deloitte head of tax policy Bill Dodwell, PwC head of tax Kevin Nicholson and Ernst & Young (E&Y) head of tax John Dixon all vigorously defended their work.

The committee chair Margaret Hodge said to the Big Four,"it seems to me that you are trying to minimize the tax wealthy individuals and corporations pay," before asking what the firms thought was the difference between efficiency, avoidance and evasion.
Dixon began by saying that EY does not advise customers on tax evasion, as it is illegal, to which Hodge responded with a quote from a judgement in a ruling against E&Y on the Green King Case, which was "it is common ground that the accounting treatment should be adopted in any case is dictated in part by legislation, in part by recognised accounting standards and in part by professional judgements."

Hodge also claimed someone at PwC had told her that PwC would approve a tax product if there is a 25% chance of it being upheld, which Nicholson denied.

As the argument went onto whether the Big Four offered 'schemes' for tax avoidance or personal advice to clients, Hodge brought up PwC's offer to Carlisle European Estate Partners and to Heineken, both of which involved creating complex structures and the use of a Swiss Procurement Supply Chain (SPSC) to minimise tax.

The inquiry went into detail about the Big Fours relationship with the government and HMRC, with it being described as "cosy." Hodge specifically brought up Jonathan Bridges, who took a secondment from KPMG to help develop new Patent laws, and then returned to KPMG, to allegedly help KPMG clients manipulate the law.

McCormick disputed this ascertain, pointing out that, as technical experts in their field, it was only natural that the Government should seek their help in developing new legislation.

The Committee concluded with Hodge suggesting that, in ten years time, the Big Four will have admitted they were acting in a dishonest way, to which, firms disagreed.

Top Content

    South Africa: sensing new opportunities

    It has been an interesting couple of years for the profession in South Africa. A number of high-profile scandals have brought the profession and the role of auditors into sharp public focus, brewing a distrust towards accountants and a large expectations gap. Joe Pickard reports.

    read more

    Ghana: a quest for consistency

    Ghana’s current economic profile would suggest a fertile landscape for purveyors of accounting services. But inconsistent approaches to compliance and application of standards – coupled with problems in the banking sector and consequent liquidity constraints – have created a challenging environment. Paul Golden writes.

    read more

    Drone technology: audit takes to the skies

    The movement towards a digitised era has already impacted the auditing profession in a number of ways, from blockchain to artificial intelligence. Now firms are taking to sky and using drone technology in their audits. Mishelle Thurai speaks to Big Four firms to find out more.

    read more

    SBC: a new alliance joins the market

    Jonathan Minter speaks to Paul Tutin, chair of founding firm Streets Chartered Accountants, about why the business and its European partners took the decision to launch their own association.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.