PwC are right to defend their tax avoidance stance

06 Feb

Quite rightly, PwC, one of the so-called ‘Big Four’, is hitting back at conclusions drawn by the Public Accounts Committee (PAC) in a report released today.  The document says the accountancy mega-group is offering tax avoidance schemes on “an industrial scale.”
A PwC spokesperson is quoted as saying: “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.”

With depressing predictability, there seems some confusion amongst some members of the PAC and others over the vast difference between tax avoidance, which is wholly legal, and tax evasion, which is clearly against the law.

By offering advice to clients on ways they can legally mitigate their tax obligations, PwC are simply doing their job on devising robust and sensible financial planning strategies for their clients.

This PwC saga is the latest chapter in a long-running story. A number of MPs have been attacking prominent companies, institutions and individuals who legally mitigate their tax obligations, hoping, it can be reasonably assumed, to generate public support and subsequently secure votes.

However, as I have said before, it is the politicians who have the power to make a change to the current system, therefore it is they who are accountable for its flaws, not financial advisers, lawyers or accountants, amongst others, who are acting within the law.

There is, in my view, a strong need to revamp what is an extremely multifarious taxation system.  As a PwC spokesperson points out today: “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 underlying fact remains.  Tax is not a question of morality.  It never has been, and despite attempts to the contrary, it never should be.  Every individual and organisation has a duty to pay the required amount of tax as set out by the government.

Firms such as PwC advising clients to legally mitigate tax requirements are perfectly justified to do so and are right to defend their position.

Click here for my Twitter account.


Your comment

Your email address will not be published. Required fields are marked *

Financial Health Quiz

Discover your financial well-being with the Financial Health Quiz.

In just 2 minutes, assess your finances, get personalized results, and actionable steps – all for free.

Take the quiz

Get the latest from Nigel Green