Government has never tried to recover legal costs from promoters of tax avoidance schemes and continues to award them taxpayer funded contracts
Despite the evidence of fraudulent schemes, no major accountancy firm has ever been disciplined by any professional accountancy body
Professor Prem Sikka writes that Her Majesty’s Revenue and Customs (HMRC) is investigating some 41,000 tax avoidance schemes, but there is still no investigation of the industry that designs and markets aggressive tax avoidance schemes . . .
Now the public accounts committee (PAC) chair Margaret Hodge has PwC, Ernst & Young, KPMG and Deloitte in her sights. The PAC should investigate the role of these firms in organised tax avoidance. An earlier internal HMRC study estimated that these four firms “were behind almost half of all known avoidance schemes” . . .
Despite the evidence, no accountancy firm has ever been disciplined by any professional accountancy body and despite spending millions of pounds to quash predatory schemes, the UK Treasury has never sought to recover the legal costs from the promoters of the schemes. Instead, the big accountancy firms continue to receive taxpayer funded contracts . . .
No government will be able to effectively tackle tax avoidance without shackling the designers and enablers.
Read the whole article here: http://www.guardian.co.uk/commentisfree/2012/dec/08/predatory-practices-accountancy-firms
Why does the government expect the taxpayer to compensate for Deloitte’s failure? Deloitte can afford to pay for its mistakes.
An accountancy website reported on 30th January that an employment tribunal has ruled that, when acting as administrators to Woolworths after its collapse in 2008, Deloitte failed in its legal duty to consult the union USDAW.
More than 24,000 former Woolworths employees have been awarded up to £67.8m in compensation, ending a three-year battle following closure, but the compensation will not apply to 3,000 employees who worked in smaller branches where fewer than 20 redundancies were made.
Responsibility for the compensation payments rests with the taxpayer through the government’s Redundancy Payments Office
Deloitte – which describes itself as possessing the broadest and deepest range of skills of any business advisory organisation – was also in the news this week over its dealings with the MG Rover company and its parent, Phoenix Holdings.