MPs denounce “cosy” relationship between Treasury and tax firms

A committee of Westminster MPs have slammed HM Revenue and Customs for what they described as “too cosy” a relationship with large accountancy firms which advise wealthy individuals and corporations on how to avoid tax.

A hard-hitting parliamentary report produced by the House of Commons Public Accounts Committee said HMRC and the Crown Prosecution Service was failing to do enough to bring tax cheats to court, with the tax authorities often preferring to come to arrangements with large companies to recover tax owed.

Committee chairwoman Margaret Hodge (pictured) said the PAC’s investigations over five years had exposed how firms such as Google, Starbucks and Amazon use “artificial structures and complex transactions” to move profits out of the reach of the taxman.

And she said hearings with the “Big Four” accountancy firms had laid bare the existence of a “tax avoidance industry” of accountants, advisers and lawyers, “making lucrative business out of designing and selling ways for clients to avoid tax”.

Mrs Hodge singled out Pricewaterhouse Coopers (PwC) as “selling these schemes on an industrial scale”.

She said it was “disappointing” that HMRC had rejected the PAC’s call for a tougher code of conduct for tax advisers. She welcomed Chancellor George Osborne’s Budget announcement of new criminal offences for assisting tax evasion.

An HMRC spokesman said: “We have shut down marketed avoidance schemes, closed loopholes, secured tough new enforcement powers, and opened up international information exchanges so rich evaders will have no safe havens where they can hide their money.”