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Labour Party’s McDonnell takes aim at the Big 4 accountancy firms
Labour shadow chancellor John McDonnell says the large accountancy firms need to take a new ‘Hippocratic Oath’ to maximise the amount of tax their clients pay. Speaking at the World Economic Forum in Davos, McDonnell said the Big 4 were not doing enough to tackle tax avoidance. And he warned public anger over this issue was building.
McDonnell felt the firms must change their entire ethos and rediscover their moral purpose. He told the BBC: “I think we need a new Hippocratic oath for accountancy firms, where they sign up to being committed to tackling tax avoidance themselves, rather than coming up with all these bizarre schemes to enable that to happen.”
McDonnell (pictured) described the situation as a cartel, and said the Big 4 are dominating the sector. He ventured: “If they don’t act they will be open to real public opprobrium.”
Meanwhile, ICAEW CEO Michael Izza says that there is no need for an accountant’s Hippocratic Oath specifically for tax, as chartered accountants already ensure that taxpayers pay the right amount of tax due under the law. “In this way we help reduce the tax gap by supporting good tax compliance,” he suggested.
Izza emphasised that the ICAEW has “been saying for years that there is no place in our profession for anyone involved in the creation or promotion of artificial, contrived or aggressive tax avoidance schemes”. He applauded McDonnell, however, for wanting to deliver a fairer, more equitable, more prosperous society.
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