[LONDON] A UK parliamentary panel accused PricewaterhouseCoopers LLP of promoting tax avoidance by multinational companies and misleading lawmakers as it called on authorities to urgently review accountancy practices.
"We believe that PricewaterhouseCoopers's activities represent nothing short of the promotion of tax avoidance on an industrial scale," Public Accounts Committee Chairwoman Margaret Hodge said in a statement Friday. Unless Her Majesty's Revenue & Customs "takes urgent action, this irresponsible activity will go unchecked, causing harm to both the public finances and the reputations of the companies involved," she said.
Chancellor of the Exchequer George Osborne has stepped up the fight against tax evasion amid growing outrage at maneuvers used by businesses including Google Inc., Apple Inc. and Starbucks Corp. In December, he introduced a levy on companies that artificially shift profits into tax havens. The Public Accounts Committee, which has held a series of hearings on techniques used by various companies, published a report Friday on the role of large accountancy companies in tax avoidance.
Ms Hodge said her committee believed PWC's testimony in January 2013, in which it stated that it wasn't in the business of selling schemes, and neither mass-marketed, produced nor promoted tax products, was "misleading." Contrived Structures "This is the second time we have had cause to examine the role of large accountancy firms in advising multinational companies on complex strategies and contrived structures" to avoid tax, Ms Hodge said. "Contrary to its denials, the tax arrangements PwC promotes, based on artificially diverting profits to Luxembourg through intra-company loans, bear all the characteristics of a mass-marketed tax avoidance scheme." Ms Hodge also said the government needs to take a more active role in regulating the tax-advice industry as it "cannot be trusted to regulate itself." PwC rejected Ms Hodge's claims it had misled lawmakers about its activities, though it agreed the tax system was "too complex" and said it would continue to support its reform.
"We stand by the evidence we gave the Public Accounts Committee and disagree with its conclusions about the work we do," the company said in a statement. "But we recognise we need to do more to explain the positive role we play in the tax system and in helping businesses to operate successfully."