Big Six - PW raided by Customs
Price Waterhouse was left fuming this week, after Customs & Excise raided three of its offices in a major investigation into VAT avoidance by a US company.
Armed with search warrants, Customs removed documents from PW’s Glasgow, London and Birmingham offices. They are believed to be searching for more information on the import duty, tariff suspensions and VAT paid by a UK-based subsidiary of a large US manufacturer.
Staff at PW contacted Customs prior to the raids and volunteered information about payments, as well as handing over about z100,000 in duty.
They thought they had established a ‘spirit of co-operation’ and were angry Customs felt it necessary to carry out the raids when they had shown willingness to hand over relevant files.
There was also concern about information on the raids being disclosed to several national newspapers, including Accountancy Age. PW officials said the firm would ‘continue to co-operate with enquiries.’
The underlying message was that Customs would use extensive powers to crack down on tax avoidance even if it meant investigating the highly reputable Big Six firms.
Last October, the Inland Revenue launched raids on about 80 companies and Ernst & Young and Coopers & Lybrand, signalling a massive clampdown on tax avoidance.
It was believed to be hunting for evidence of off-shore invoicing schemes offering tax savings to clients, exactly the kind of scheme which looks likely to be stamped out by next week’s Budget.
David Oliver, tax partner at Arthur Andersen, said: ‘The chancellor doesn’t see a big difference between evasion and avoidance, and he’s looking to lag the pipes everywhere.’