Accounting firm PwC accused of promoting tax avoidance

Big Four accountancy firm PricewaterhouseCoopers (PwC) has been accused of promoting "tax avoidance on an industrial scale" in a scathing report by MPs.

PwC is said to have provided "complex strategies and contrived structures" to help big companies slash tax bills.

Some of the multinational firms named include Amazon, Ikea, Burberry, Coca-Cola and Vodafone.

An investigation by the Commons' Public Accounts Committee (PAC) found arrangements to divert profits artificially via Luxembourg promote by PwC "bear all the characteristics of a mass-marketed tax avoidance scheme".

The report comes after hundreds of documents appearing to show how the firm secured deals with Luxembourg tax companies for 343 multinational companies were leaked last year.

Chair of the PAC Margaret Hodge said: "We believe that PwC's activities represent nothing short of the promotion of tax avoidance on an industrial scale.

"The effect has been to reduce the amount of corporation tax that some multinational companies pay in the countries in which they make their profits."

The committee said the new report contradicts evidence the PwC gave to them in 2013.

It said: "PwC had told us that it does not sell schemes, but the Luxembourg leaks suggest that PwC had advised many multi-national firms to adopt similar complex financial structures for the purpose of avoiding tax."

The report called for the government to take a more active role in regulating the tax industry "as it evidently cannot be trusted to regulate itself".

The MPs' report came as the National Audit Office (NAO) found HMRC had made "good progress" since 2010 towards its aims of maximising revenue and making sustainable cost savings.

It said the department had tackled some of the root causes of marketed tax avoidance and had received new powers to allow it to challenge the users of avoidance schemes more quickly.

The gap between the tax that is collected and should be collected was £34 billion in 2012-13 according to HMRC, of which £3.1 billion was lost to tax avoidance.

PwC said in a statement: "We stand by the evidence we gave the Public Accounts Committee and disagree with its conclusions about the work we do.

"But we recognise 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."