Big Four given three months to prepare for PAC

The Big Four accountancy firms will not - for at least three more months - be facing a gladiatorial grilling by the Public Accounts Committee (PAC) over their role in the tax avoidance row that has engulfed a swathe of multinationals such as Starbucks, Amazon and Google.

A spokesman for PAC confirmed to AccountancyLive that there was no likelihood of the Big Four being called to appear before the committee before March 2013 at the earliest.

Earlier this week, PAC chair Margaret Hodge told BBC Radio 4's Today programme: 'The certainty that we want, particularly from the big four accountancy firms - who have a duty to lead by example - is that, in the advice they give to their clients, they are not advising how to engage in aggressive tax avoidance schemes.'

The spat has ignited the debate about how multinational companies operating in the UK - many of them advised by the Big Four - enjoy a distinct competitive advantage over their UK-based rivals through their ability to legally use low-tax havens.

Hodge said firms not taking a tough stand on the issue should be denied lucrative government outsourcing contracts.

'If we are to promote a culture change in the UK, we have got to take action now,' she said. 'I think using the power of the public purse to purchase contracts is an important power that we have.

Recent research by the Tax Justice Network and the broadcaster found that the Big Four had over 200 offices scattered over 45 of the world's lowest-tax jurisdictions Liechtenstein, Bermuda and the Cayman Islands.

Starbucks last week caved in to public pressure and announced that it will pay an extra £10m a year in corporation tax in the UK until it turns a profit. Since it opened in the UK in 1998 the company has racked up over £3bn in coffee sales, and opened 735 outlets but paid only £8.6m in income taxes while commanding close to a third of coffee sales in the UK.

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