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| The 'big four', transparency and tax reform | The 'big four', transparency and tax reform |
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| The public accounts committee's report highlighting the "big four" accountancy firms' conflict of interest in advising the government on tax reform while advising clients on tax avoidance (Inside knowledge lets rich off tax hook, says MPs' report, 26 April) is welcome but only scratches the surface of a much bigger problem. The Treasury is not the only department to receive secondments from firms to advise on policy matters in which they have a direct conflict of interest. | The public accounts committee's report highlighting the "big four" accountancy firms' conflict of interest in advising the government on tax reform while advising clients on tax avoidance (Inside knowledge lets rich off tax hook, says MPs' report, 26 April) is welcome but only scratches the surface of a much bigger problem. The Treasury is not the only department to receive secondments from firms to advise on policy matters in which they have a direct conflict of interest. |
| The role firms such as McKinsey played in the drawing up of the coalition's NHS reforms is well documented. Similarly, it is known that dozens of staff working for energy companies have been seconded to the Department of Energy and Climate Change. Any company providing such a central role in the policy formulation of a political party would have to declare such advice as a donation in kind, yet such information must be eked out via FoI requests, which are often frustrated by claims of "commercial confidentiality". | The role firms such as McKinsey played in the drawing up of the coalition's NHS reforms is well documented. Similarly, it is known that dozens of staff working for energy companies have been seconded to the Department of Energy and Climate Change. Any company providing such a central role in the policy formulation of a political party would have to declare such advice as a donation in kind, yet such information must be eked out via FoI requests, which are often frustrated by claims of "commercial confidentiality". |
| The benefits of such secondments to companies are obvious: not only do they have the opportunity to influence government policy, but the contacts and experience their staff garner during such periods will help them in the longer term. This competitive advantage is often even paid for by the taxpayer. This situation must be subject to much greater public scrutiny than it is at present. At a minimum, the government should publish a register declaring all such secondments and what they are working on in all departments as a matter of course. At the same time, the coalition must fulfil its promise of a lobbying register so we can see what the policy areas the companies involved are actively seeking to influence. Alexandra Runswick Unlock Democracy | The benefits of such secondments to companies are obvious: not only do they have the opportunity to influence government policy, but the contacts and experience their staff garner during such periods will help them in the longer term. This competitive advantage is often even paid for by the taxpayer. This situation must be subject to much greater public scrutiny than it is at present. At a minimum, the government should publish a register declaring all such secondments and what they are working on in all departments as a matter of course. At the same time, the coalition must fulfil its promise of a lobbying register so we can see what the policy areas the companies involved are actively seeking to influence. Alexandra Runswick Unlock Democracy |
| • These complex structures which have made corporate tax voluntary for large corporations, but company tax compulsory for the small players, thrive because the accounting profession is allowed to get away with claiming a false distinction between tax avoidance and tax evasion. The line delineating the two is not clearcut. Some tax avoidance schemes are declared illegal by courts. A subset of these rejected schemes could presumably be deemed to be measures to provide information in a manner deliberately to create a false impression to reduce the tax bill. The sellers and purchasers of these subset of schemes have presumably attempted to obtain pecuniary advantage through deception. | • These complex structures which have made corporate tax voluntary for large corporations, but company tax compulsory for the small players, thrive because the accounting profession is allowed to get away with claiming a false distinction between tax avoidance and tax evasion. The line delineating the two is not clearcut. Some tax avoidance schemes are declared illegal by courts. A subset of these rejected schemes could presumably be deemed to be measures to provide information in a manner deliberately to create a false impression to reduce the tax bill. The sellers and purchasers of these subset of schemes have presumably attempted to obtain pecuniary advantage through deception. |
| Yet no criminal prosecution is brought against those who sell and use schemes that are subsequently thrown out by the courts on the ground of deliberately giving a misleading impression of relevant facts. Surely it is not beyond the wit of government to tighten up legislation to ensure that any criminal prosecution brought against the purveyors and users of egregious avoidance schemes would succeed. A spell in jail for these people would be a more socially desirable association between government and accountants specialising in tax avoidance than the current system of secondment into the Treasury and HMRC. SP Chakravarty Bangor, Gwynedd | Yet no criminal prosecution is brought against those who sell and use schemes that are subsequently thrown out by the courts on the ground of deliberately giving a misleading impression of relevant facts. Surely it is not beyond the wit of government to tighten up legislation to ensure that any criminal prosecution brought against the purveyors and users of egregious avoidance schemes would succeed. A spell in jail for these people would be a more socially desirable association between government and accountants specialising in tax avoidance than the current system of secondment into the Treasury and HMRC. SP Chakravarty Bangor, Gwynedd |
| • The findings of the PAC will add fuel to the fire at a time when many already question the transparency and fairness of the UK tax system. While there are measures being put in place to tackle tax avoidance (such as the general anti-abuse rule), it is clear that improvements in tax legislation are essential to address this ongoing issue. Questions over the integrity of the tax system will only further exasperate smaller businesses who already feel at a disadvantage to larger organisations that can access greater consultancy resources. | • The findings of the PAC will add fuel to the fire at a time when many already question the transparency and fairness of the UK tax system. While there are measures being put in place to tackle tax avoidance (such as the general anti-abuse rule), it is clear that improvements in tax legislation are essential to address this ongoing issue. Questions over the integrity of the tax system will only further exasperate smaller businesses who already feel at a disadvantage to larger organisations that can access greater consultancy resources. |
| We cannot shut out these big multinationals altogether – the UK must remain "open for business" – but more needs to be done to ensure there is a code of conduct so that all businesses play fair. David Cameron has indicated that tax avoidance and evasion will be at the heart of the G8 summit. Surely the government has to take this opportunity to create a global system of co-operation and transparency and restore public trust in the UK. Adam Harper Association of Accounting Technicians | We cannot shut out these big multinationals altogether – the UK must remain "open for business" – but more needs to be done to ensure there is a code of conduct so that all businesses play fair. David Cameron has indicated that tax avoidance and evasion will be at the heart of the G8 summit. Surely the government has to take this opportunity to create a global system of co-operation and transparency and restore public trust in the UK. Adam Harper Association of Accounting Technicians |
| • It seems that the PAC has a sense of humour in challenging failures in HMRC and conflicts of interest with exchanged/embedded employees from large accountancy companies. Considering the conflict of interests exhibited by parliamentarians and their abject failures to tackle unfairness in the tax system, trying to blame others is lamentable and shameless; the system's failures are compounded by the surrender of many rules to EU suzerainty. | • It seems that the PAC has a sense of humour in challenging failures in HMRC and conflicts of interest with exchanged/embedded employees from large accountancy companies. Considering the conflict of interests exhibited by parliamentarians and their abject failures to tackle unfairness in the tax system, trying to blame others is lamentable and shameless; the system's failures are compounded by the surrender of many rules to EU suzerainty. |
| We have, in proportion, the highest number of accountants producing, all too often, worthless sets of accounts, eg pre-crash assertions that many banks were highly profitable and ongoing concerns – a tremendous waste of resources. The tax and benefit system could be easily transformed to a simple, robust and equitable one – all it requires is the political will – but there are too many vested interests in retaining the status quo. Mark Bill Liverpool | We have, in proportion, the highest number of accountants producing, all too often, worthless sets of accounts, eg pre-crash assertions that many banks were highly profitable and ongoing concerns – a tremendous waste of resources. The tax and benefit system could be easily transformed to a simple, robust and equitable one – all it requires is the political will – but there are too many vested interests in retaining the status quo. Mark Bill Liverpool |
| • Permanent secretaries may quiver under the ferocious cross-examination which Margaret Hodge and her all-party PAC colleagues display on BBC Parliament (On a mission, 27 April), but these forensic skills aren't plucked out of thin air. Perhaps you should have mentioned that her apparent omniscience derives from the stream of reports provided to her committee by the auditor general and his National Audit Office colleagues, who are the eyes and ears of parliament wherever public money is spent. Brian Biddiscombe Darlington | • Permanent secretaries may quiver under the ferocious cross-examination which Margaret Hodge and her all-party PAC colleagues display on BBC Parliament (On a mission, 27 April), but these forensic skills aren't plucked out of thin air. Perhaps you should have mentioned that her apparent omniscience derives from the stream of reports provided to her committee by the auditor general and his National Audit Office colleagues, who are the eyes and ears of parliament wherever public money is spent. Brian Biddiscombe Darlington |
| • It seems Burgess and Maclean, the KGB moles in the Foreign Office, have their 21st-century equivalents in the double agents of KPMG and fellow accountants in the Treasury. Assuming such activities cannot be prosecuted under the Official Secrets Act, perhaps we need a new offence on the lines of conspiracy to pervert the collection of HM Revenue. Doug Bastin Chester | • It seems Burgess and Maclean, the KGB moles in the Foreign Office, have their 21st-century equivalents in the double agents of KPMG and fellow accountants in the Treasury. Assuming such activities cannot be prosecuted under the Official Secrets Act, perhaps we need a new offence on the lines of conspiracy to pervert the collection of HM Revenue. Doug Bastin Chester |
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