ICAS has challenged the Public Affairs Committee (PAC) report on Google’s tax behaviour, saying it ‘appears to ignore the reality that governments make tax law’ and the requirement for tax advisers to provide information on legal ways to mitigate tax costs say Harris & Co accountants Northampton.
Elspeth Orcharton, ICAS director of taxation, said: ‘It is governments who create tax law, and who compete for inward investment by large international businesses, sometimes by reducing tax rates, sometimes by providing specific exemptions or reliefs from tax. The PAC, politicians and governments should not be surprised when the tax outcome is part of an international business’s decision on where to structure and locate activities.’
Orcharton said that it was appropriate for individuals and businesses to manage their affairs in accordance with the law, to claim reliefs and exemptions which the law provides, and to organise bona fide commercial transactions in the way which minimises the tax incurred.
‘UK law also imposes on tax advisers a professional obligation to advise clients who are interested on legal ways to mitigate tax costs, whether in the UK or otherwise. If they fail to do so they may be professionally negligent.
"It is unfortunate that the PAC or any government should criticise businesses for structuring activities in response to a particular government policy, or criticise tax advisers for undertaking advisory work in accordance with their legal duty of care obligation, without acknowledging those factors,’ Orcharton said.
The PAC report states that "the professional bodies of the accountancy profession should emphasise the importance to accountancy firms of behaving responsibly in selling tax advice to clients".
ICAS pointed out that their members are already bound by a code of ethics, which includes principles relating to tax avoidance, and a practical code of conduct covering tax avoidance.
Orcharton stressed that HMRC needed to be adequately resourced if it was to combat unacceptably abusive tax avoidance, and that ICAS supported the work being done on an international level by the Organisation for Economic Cooperation and Development (OECD) to modernise international tax rules