Hodge delivers fresh attack on tax avoidance

By Sarah Perrin

12 February 2015

The chair of the Public Accounts Committee talked tough on tax avoidance at an ICAS members event in London.

Professional tax advisers heard some tough talking from Margaret Hodge MP, chair of the Public Accounts Committee (PAC), when she spoke at an ICAS Business Insights event in London on 10 February.

The Labour MP for Barking said: "There are too many instances where one feels the advisers are playing a role to offer a scheme or product to individuals or companies which are clearly outside the intent of Parliament."

Ms Hodge's words came just days after the PAC released its 17-page report on tax avoidance and large accountancy firms, in which PwC came in for particular criticism for advising clients on Luxembourg-based tax schemes.

Ms Hodge told the gathered CAs that she was "cross" with PwC, which she felt had "misled" the PAC in past evidence. "I think this is tax avoidance on an industrial scale," she said.

She challenged any suggestion that politicians are to blame for tax avoidance because they get the law wrong.

Ms Hodge said: "For me, it's both a legal and a moral issue. In the first instance, it's really impracticable to think you can create a really watertight legislation. And all of you would be out of business if you didn't spend time trying to find either different interpretations of the law or ambiguities in the law which enable you to find artificial devices which allow people not to pay their tax."

Recent events, such as the PwC Luxembourg letters, had clearly shocked the MP. She said: "It does leave me questioning the role of advisers and how we might think about strengthening the legislative base so that we create a new offence.

"So that if an adviser does devise a product that is later found to be against the intentions of Parliament, you don't just fine the taxpayer who didn't pay the tax, but you also fine the adviser who gave the advice that this was a legitimate scheme."

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