In the Media

MP accuses QCs on tax avoidance

PUBLISHED February 22, 2013

Monday 25 February 2013 by Catherine Baksi

MPs have turned their attention to lawyers who advise promoters of tax avoidance schemes.

In a report examining marketed tax avoidance schemes, the House of Commons Public Accounts Committee (PAC) identifies 'leading lawyers', along with banks and accountancy firms, as supporting and advising on tax avoidance schemes.

The report expresses alarm at the way promoters of such products escape penalties for failing to disclose them to HM Revenue & Customs by using a QC's opinion that they have a 'reasonable excuse' for non-disclosure.

Questioning Aidan James, a tax adviser, committee chair Margaret Hodge named four QCs as 'guys who prostitute themselves to these schemes'. None of the four was at the hearing.

In evidence, Tim Levy, the director of Future Capital Partners - one of the companies that the PAC said had exploited tax breaks intended to help the film industry - told MPs: 'We have engaged with all the magic circle law firms at some point in time or other.'

Up to now critics of tax avoidance have focused on the big four accountancy firms - KPMG, PricewaterhouseCoopers, Deloitte and Ernst & Young - which were grilled by the committee last month.

The PAC's report says promoters of schemes that exploit legal loopholes or abuse tax reliefs are 'running rings' around HMRC, costing the taxpayer £5bn in lost revenue each year.