Were you as angry as I was at the headlines and media focus on a clearly misguided element of the latest report by the Public Accounts Committee (PAC)?
Committee chairman Margaret Hodge said accountants seconded to government represented a “ridiculous conflict of interest” that should be ended. She had clearly made up her mind based on no real evidence and was determined to use her position to grab a few more headlines and to make sure accountants become the new bogeymen (sorry – I cannot find a gender neutral word).
Hodge referenced just ONE (non) example to justify her sweeping criticisms. Despite the paucity of her arguments the media is gleefully repeating Hodge’s criticism of all the Big 4 firms and, implicitly, accountants in general. Re Hodge’s single ‘proof’, what really happened I suspect is this:
The last LABOUR Gov’t wanted to introduce a tax relief to reduce taxes for those who qualify for the patent box regime. To ensure the relief worked as intended they sought outside help (from KPMG). Could have been any of the Big 4.
Once the law was introduced, KPMG (and all the others) then helped promote the concept so that the regime (introduced by LABOUR) would be a success. There were no loopholes to exploit. The advice given to clients was to ensure they could benefit from the new regime – as the Government intended.
I listened to Mrs Hodge being interviewed on the Today programme on Friday and was frustrated by her outrageous slurs on our profession. The Treasury also disagreed with the criticisms saying the PAC’s analysis and conclusions:
“bear almost no resemblance to the reality of what government is doing or what is happening. In particular, as a matter of principle, the suggestion that government shouldn’t work with business, and indeed anyone affected by its policies, is totally absurd.”
Treasury Minister, David Gauke, was also critical of the report, saying:
“The idea that we shouldn’t make use of private sector expertise in developing a tax system that would bring investment and development to the UK is absurd. They’re not going out to advise clients on how to dodge the legislation, they’re going out to advise clients on how to abide by the legislation.”
As the FT noted, also critical of the ill-informed PAC report were ICAEW, CIOT and the trade union that represents senior staff at HMRC (The Association of Revenue and Customs). But of course most of the media have chosen to ignore such criticisms. They seem to like having someone new to criticise even if the facts do not support this. The media have got fed up of criticising MPs and the bankers. I fear that accountants are to be identified as the new bogeymen. What do you think and what can we do about it?
ps: The other thing that worries me is that I know how biased and inaccurate Hodge and the PAC are on this matter. It makes me very cynical as to the reliability of other reports produced by the PAC and, indeed any Parliamentary committee. If this one can be so far off the mark, it’s likely that others are too. How much reliance should be placed on any of them?
Some of the recent headlines:
- Accountants seconded to government are ‘abusing position’
- Accountants helping “the rich avoid tax” using insider knowledge, MPs claim
- ‘Big four’ accountancy firms too cosy with government, says MPs
- Treasury accountants accused of helping rich to avoid tax
- Britain’s ‘big four’ accountants deny tax loophole claims