Tuesday, May 21, 2013

Big 4 accountancy firms: a truly shocking statistic

From Prem Sikka:
Anyone looking at the websites of accountancy firms will see claims of ethics, integrity, and a burning desire to serve the public interest and uphold the law. Yet, following a briefing from a former PwC insider the PAC chairperson said (see page Ev4) that the firm “will approve a tax product if there is a 25% chance – a one-in-four chance – of it being upheld. That means that you are offering schemes to your clients where you have judged there is a 75% risk of it then being deemed unlawful”.
Our emphasis added.

That is quite appalling.

Partners from other firms claimed their threshholds were 50%, which is almost as bad.

"The firms know that in the age of austerity the tax authorities will never have sufficient resources to challenge them."

In the United States, Ernst & Young paid a fine of $123 million to the US tax authorities to resolve allegations of tax fraud; KPMG paid a fine of $456 million after admitting “criminal wrongdoing” over the sale of avoidance schemes and a number of its former personnel also received prison sentences. But in Britain:
"A large number of tax avoidance schemes have been declared illegal by the UK courts. The UK Ministers have referred to the schemes marketed by the big accountancy firms as “blatantly abusive avoidance scams”, but this has not been followed up with any investigation, inquiry, prosecutions or fines. No accountancy firms has ever been fined or disciplined by its professional body for selling unlawful tax avoidance schemes. In fact, there are no negative consequences for the designers of such schemes."
The rule of law, and the economy, is being progressively undermined and subverted by some of the best-paid people in the country. It's time to throw the book at them.


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