MPs says PwC promoted tax avoidance 'on industrial scale'

Personal Financial Reporter Brian Milligan on BBC news today reveals that the accountancy firm PricewaterhouseCoopers (PwC) has been accused of promoting tax avoidance "on an industrial scale", as stated in MPs report.

The tax avoidance schemes involve companies diverting profits to tax havens through series of loans between different parts of the business and the profits made are taxed in such places but in small amounts which will eventually reduce what would have been paid.

Margaret Hodge, chairwoman of the Public Accounts Committee (PAC) had said 
"We believe that PricewaterhouseCoopers's activities represent nothing short of the promotion of tax avoidance on an industrial scale,"

 
PwC has also been accused of a misleading report in early 2013 but in its defense it said,
"We stand by the evidence we gave the Public Accounts Committee and disagree with its conclusions about the work we do.

"But we recognize we need to do more to explain the positive role we play in the tax system and in helping businesses to operate successfully.

"We agree the tax system is too complex, as governments compete for investment and tax revenues.

"We take our responsibility to build trust in the tax system seriously and will continue to support reform."

The UK government is also in the process of introducing the Diverted Profit Tax, announced by the chancellor, George Osborne. Profits made after 1 April 2015, and diverted to other countries, will be taxed at 25%.

"Today I am introducing a 25% tax on profits generated by multinationals from economic activity here in the UK which they then artificially shift out of the country," That's not fair to other British firms George Osborne said in the Autumn Statement when he spoke to parliament in December, 2014.



BBC News