The government ‘only talk to those who have a self interest in reducing their tax contribution’ the chairwoman of the Public Accounts Committee (PAC) has told the BBC.
On Wednesday, the Big Four will be questioned by PAC on their role in recent tax scandals. Margaret Hodge, chairwoman of PAC, has made her view clear that tax laws are too heavily influenced by large companies and accountancy forms. Working groups set up by the government to discuss tax reforms were dominated by interested parties, she said.
‘What to me is really dangerous… is that many are working very closely both with HMRC and with the Treasury to devise new tax changes… and then they exploit those perfectly legitimate objectives’.
Two managers from KPMG have recently helped the Treasury to formulate new tax changes, some of which have been controversial: companies which have offshore finance arms can now pay a quarter of the standard 23% rate of corporation tax.
Head of Tax at KPMG, Jane McCormick, has asserted that clients don’t benefit when accountancy firms oversee the tax policy-making process. ‘Clearly there is an advantage to us if we were involved in the formulation of the legislation, but… government formulates policy, we provide technical expertise to help them to do that.’
‘There has been a lot of very bad legislation enacted in the past, very often because government and the civil servants don’t have an understanding of what happens in the commercial world.’