- 4 updates
The Commons Public Accounts Committee named the following firms for being able to exploit loopholes in tax laws - a practice which is perfectly legal.
- Ernst and Young
- The committee warned that HM Revenue & Customs was engaged in a "battle it cannot win" in seeking to stem the losses to the Exchequer from tax avoidance.
- It has far fewer resources than the big four accountancy firms
- They employ almost 9,000 staff and earn £2 billion a year from their tax work in the UK
The Public Accounts Committee highlighted the way some firms seconded staff to the Treasury to advise on technical issues in the drafting of legislation - only for the individuals concerned to return to advise clients on how to use those laws to avoid tax.
A group of MPs is questioning the relationship between Britain's big four accountancy firms and the Government in what has become an "unhealthy relationship".
The Public Accounts Committee says accountancy firms can use the information from the Treasury to help their clients avoid paying tax. Some companies employ staff who have temporarily worked in Whitehall.
The accusations of insider knowledge come from the Chair of the Public Accounts Committee, Margaret Hodge. She says the practice represents a "ridiculous conflict of interest" which should be banned.