[ 2014-12-08 ]

PwC denies 'mass marketing' tax avoidance schemes
PwC has denied “mass marketing” tax avoidance
schemes to companies after being accused of
helping firms avoid bills to the Treasury on an
"industrial" scale.

Kevin Nicholson, the accountant’s head of tax
for the UK, defended the advice it gave businesses
over their arrangements, and told MPs that the
measures used by multinationals to manage taxes
had been approved by Parliament.

The tax policies of hundreds of companies have
been thrown into the spotlight by the leak of
thousands of documents that detailed how PwC’s
tax team in Luxembourg advises companies on how to
reduce bills elsewhere.

Margaret Hodge, the chairman of the Commons Public
Accounts Committee, said the arrangements were an
“outrage”, and that it was “very hard for me
to understand that this is anything other than a
mass-marketed tax avoidance scheme”.

The committee had called Mr Nicholson and Fearghas
Carruthers, the head of tax at the pharmaceuticals
group Shire, to give evidence.

In a two-hour hearing on the matter on Monday, Ms
Hodge said Shire’s tax arrangements, which see a
division in Luxembourg loan other arms of the
company billions of dollars to finance investments
and acquisitions, was a “scam”.

Shire’s Luxembourg operation has just two full
time employees, earning a combined €135,000
(£107,000).

Ms Hodge said it was “stretching our credulity
to suggest these two employees are seriously the
guys taking the decisions on loans worth more than
$10bn”.

“If the decisions aren’t taken in Luxembourg
it isn’t just avoidance, it's fraud,” she
said.

Mr Carruthers said the arrangements were “not a
scam” and were above board. “We pay all the
tax we owe,” he said.

Mr Nicholson defended the tax arrangements PwC
helps broker. “Parliament has looked at this
area and corporate tax reforms [in place] were
passed with all-party support,” he said.

“They said we need British businesses to finance
capital in a tax efficient way. You might not like
it, but fundamentally the Government agreed that
it’s good for the UK economy if businesses have
the ability to access cross-financing.”

Ms Hodge said she felt that Mr Nicholson had
“misled” MPs when saying that PwC did not mass
market tax avoidance schemes to companies at an
earlier hearing, and said he would be called to
give further evidence.

Source - The Telegraph

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