Government accountants are spilling the beans on tax loopholes, say MPs

A government committee is pushing for a ban on external accountants working inside government. It represents a 'ridiculous conflict of interest' says chairwoman Margaret Hodge.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
The government has been left looking rather foolish this week following warnings from the Commons Public Accounts Committee that external accountants working within HMRC were passing on details of tax loopholes to private clients.

The Committee’s report into UK tax avoidance put a spotlight on ‘inside jobs’ where accountants hired by the public sector were learning how to beat the tax system while on the public payroll. ‘We have seen what look like cases of poacher turned gamekeeper, turned poacher again, ‘ says the report. ‘Individuals who advise government go back to their firms and advise their clients on how they can use those laws to reduce the amount of tax they pay.’

And the Committee has not been shy about pointing the finger at specific accountancy firms either. ‘We are very concerned by the way that the four firms appear to use their insider knowledge of legislation to sell clients advice on how to use those rules to pay less tax.’ Four sounds rather like ‘Big Four’, wouldn’t you say?

The MPs investigating incidences of tax avoidance said that accountants who had been seconded to work in the government were playing a ‘never-ending game of cat and mouse’ with HMRC. Committee chairwoman Margaret Hodge warned, ‘The large accountancy firms are in a powerful position in the tax world and have an unhealthily cosy relationship with government.’

As a result of the findings, the CPAC has called for a ban on the use of external accountants and a further ban on working with firms associated with selling tax avoidance schemes.

Bean counters spilling beans… You wonder why no one thought of it before.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Public failure can be the best thing that happens to you

But too often businesses stigmatise it.

Andrew Strauss: Leadership lessons from an international cricket captain

"It's more important to make the decision right than make the right decision."

Ranked: Britain's best-run companies

These are the businesses rated top by their peers for their quality of management.

Unconscious bias in action

Would you dislike someone just because they’re from the Forest of Dean?

I ran Iceland's central bank in 2009. Here's what I learned about crisis ...

And you thought your turnaround was tricky.

"It's easy to write a cheque you don't have to cash for 30 ...

But BP's new CEO has staked his legacy on going green.