The Pin-stripe Mafia
Ma+fi-a or Maf-fia n. 1. the. an international secret organisation founded in Sicily. It developed into a criminal organisation and in the late 19th century was migrated to the U.S. 2. any group considered to resemble the Mafia. See also Cosa Nostra, accounting firms
Our friends Austin Mitchell and Prem Sikka have penned another of their excellent monographs for the Association for Accountancy and Business Affairs. The title hints at the possibility that accounting firms might not be in favour: The Pin-stripe Mafia: How Accounting Firms Destroy Societies.
Over the top? Well we've just skimmed through it and find ourselves nodding in agreement with Austin and Prem. Take this for example:
The loss of tax revenues is a major cause of the current economic crisis that is inflicting misery on millions of people. Tax avoidance is part of the guerrilla warfare conducted by accountancy firms against the people. Each year, about 30%-40% of the financial legislation outlaws tax dodges dreamt up by accountancy firms. The UK tax tribunals and courts hear around 11,000 cases and many of these relate to dodges that have no economic substance. The UK is estimated to be losing around £100 billion of tax revenues each year and a large part of this is due to the activities of the Big Four accountancy firms.
By any standards this is scandalous, especially during times of terrible hardship for many ordinary people, young and old. It would be reasonable to expect our governments to take action to protect society from these scammers, but no:
Despite judges outlawing their tax dodges, successive governments have failed to investigate the firms, or prosecute their partners. Instead, the partners of major accountancy firms are given peerages, knighthoods, public accolades and government consultancies, all funded by taxpayers. The same firms have colonised regulatory bodies, fund political parties and provide jobs for former and potential ministers. This penetration of the state has bought them political insurance and their anti-social practices continue to inflict enormous social damage.
Austin and Prem don't pull their punches, and rightly so. This blogger has worked in the tax planning division of a Big 4 firm and readily recognises the anti social culture they describe.
As always Austin and Prem marshall legions of damning facts and figures to support their arguments. Cumulatively the evidence is compelling: this isn't and never was an instance of a few bad apples - the rot runs deep, deep, deep, and very few tax planners dare break the omertà.
The Pin-stripe Mafia is now available in hardcopy from:
Association for Accountancy & Business Affairs
P.O. Box 5874, Basildon, Essex SS16 5FR, UK.
Published in 2011