IN MAKING ACCUSATIONS of impropriety and conflicted interests against Big Four advisers, Margaret Hodge and her colleagues in the Public Accounts Committee have risked draining their work of much of its credibility.
The aspersions she and the committee cast in accusing tax experts of driving government policy to suit their firms’ and clients’ interests are serious. It calls into question the integrity of Treasury ministers, just as it does the staff of the four firms.
But judging by the Treasury’s stinging rebuttal to the allegations and the wider response of the profession, it clearly is not the case, and there are stringent regulations to guard against the committee’s concerns being borne out.
The committee begins to appear somewhat ridiculous.
As KPMG UK head of tax Jane McCormick points out in her statement on the matter, the ICAEW’s professional code of conduct ensures conflicts of interest cannot occur.
In any case, what alternative is there to the Treasury and HM Revenue & Customs using people who have experience of tax and accounting at the highest level to advise on matters of tax and accountancy? Are they to start garnering the advice of everyone but those who know best?
This story has the potential to cause a huge amount of damage to the way tax legislation is produced, should it get out of hand.
The government can ill-afford to silo itself off from industry experts who, after all, are hugely experienced and eminently qualified to discuss issues and offer their analysis of tax policy and how to improve it.
One measure that could dispel the perception of cosy relationships would be to publish relationships between companies and tax authorities.
Another would be to afford more resources to HMRC and the Treasury so that they might not need to call on the industry so much to provide supplementary knowledge and resources.
One thing we can be sure of, though, is that divorcing government departments from industry experts won’t help anyone.
Calum Fuller is the tax correspondent for Accountancy Age and Financial Director.
What questions should the profession be asking now the UK has decided to leave the EU?
The accountancy world has reacted to the news that the UK has voted to leave the EU
Deloitte has made a move into the SME market with Propel, a cloud-based, £2.5m accounting services tool
French police have raided Lucamobile's Paris HQ on suspicion of money laundering and tax fraud