PwC staff grilled by MPs over Luxembourg deals 

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Accountants and business advisors PricewaterhouseCoopers (PwC) came under fire from MPs yesterday during a parliamentary hearing.

The hearing followed the leak of hundreds of Luxembourg tax rulings at the beginning of November.

“I think what you are doing is selling tax avoidance on an industrial scale,” Labour MP Margaret Hodge said to PwC’s head of tax Kevin Nicholson.

Hodge also accused Nicholson of misleading the Public Accounts Committee in January 2013 when he said PWC did not mass market tax products.

“Mass marketing means you have a scheme which you market to a whole lot of different companies. That’s what you’ve been doing and that’s what you denied which is why I accused you of lying and I don’t do that lightly,” Hodge said.

Nicholson defended PwC’s activity.

“They are all different. They are not schemes by any sense of the imagination. These are individual companies over an eight year period, all of whom need financing,” Nicholson said.

“They are mostly large sophisticated businesses with very complex arrangements. This is not like buying a dress in Marks and Spencer.”

Joining Nicholson was Fearghas Carruthers, head of tax at Shire Pharmaceuticals.

Conservative MP Stephen Phillips said that the deal set up by PWC for Shire allowed them to pay an effective corporation tax rate on its profits in Luxembourg of just of 0.0156 per cent. Carruthers, told the committee that they had two full-time staff in Luxembourg managing intra-company loans of $10bn.

“It is obviously a shell. There is no substance there,” Phillips said.

Hodge also took aim at Shire. “It is a very serious matter because if the decisions in substance aren’t taken in Luxembourg this isn’t just avoidance, for me it’s fraud,” she said.

 

Source: CITYA.M.- PwC staff grilled by MPs over Luxembourg deals

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