Introduction
We have reported previously our long-standing concerns
about multinational companies avoiding tax, the role played by
tax advisers in promoting company structures designed to avoid
tax, and the effectiveness of HMRC and HM Treasury in tackling
these problems. We have published relevant reports in December
2012, April 2013 and June 2013. In evidence used for our April
2013 report, the Head of Tax at PwC had told us that "we
are not in the business of selling schemes". In November
2014 the International Consortium of Investigative Journalists
(ICIJ) published documents showing that PwC negotiated advance
tax rulings for many hundreds of companies with the Luxembourg
tax authorities. Media attention focussed on the complex financial
strategies employed by a small number of companies on the advice
of PwC. The published documents appeared inconsistent with PwC's
previous evidence to us, as they suggested PwC had been promoting
complex structures that are similar in nature to numerous clients.
We therefore invited PWC's Head of Tax to give further evidence,
alongside the Director of Tax at Shire Pharmaceuticals, one of
the firms on which media attention had focussed. Many other major
firms were named in the Luxembourg tax rulings published by the
ICIJ and our concerns go wider than the behaviour of PwC and Shire
alone. Our conclusions and recommendations are therefore relevant
to the tax advisory industry and its clients as a whole.
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