Treasury lambasts PAC over suggestion of Big Four influence

THE PUBLIC ACCOUNTS COMMITTEE’S SUGGESTION the Big Four holds an “undue influence” over the formation of tax laws and policy “bears no relation to reality”, HM Treasury said today.

In its 44th Report of Session, the committee said the secondment of Big Four staff to government to provide technical assistance on changes to tax law was allowing the firms to advise clients on how best to exploit loopholes to drive down their bills.

“The close relationship that the four firms enjoy with government creates a perception that they wield undue influence on the tax system which they use to their advantage,” the report read.

Based on those findings, it recommended a consultation on rules banning tax-avoiding firms from winning government contracts be extended to include companies providing tax advice.

But the Treasury said such a move would be “absurd”.

In a statement, a spokesperson for the department said: “The government’s policy is absolutely clear, while we are committed to creating a competitive tax system, the taxes that are owed must be paid. We have invested almost £1bn in HM Revenue & Customs to exclusively focus on tackling evasion, avoidance and fraud and expect this to bring in an additional £22bn by 2014/15. Last week, HMRC’s High Net Worth Unit reported a 10% increase in receipts, generating an additional £220m in tax from wealthy individuals.

“The analysis and conclusions in the PAC report bear almost no resemblance to reality of what government is doing or what is happening. In particular, as a matter of principle, the suggestion that government shouldn’t work with business and indeed anyone affected by its policies is totally absurd.”

Related reading

tax dictionary