Accenture tax avoidance

Global consultancy firm Accenture – which also performs outsourced work from HMRC - has avoided tens of millions in corporation tax, paying only 3.5% of its profits in tax.

According to the Sunday Times, the firm’s accounts show that it paid no UK corporation tax in the previous years on profits of over £180m and paid £2.8m in corporation tax on nearly £82m in profits in the 2011 financial year. The accounts also reveal £12.7m in deferred tax – which it may still be liable for.

Headquartered in Ireland, Accenture’s 2009 accounts reveal it paid no corporation tax on £64m in profits and its 2010 accounts reveal it paid no corporation tax on £123m in profits.

The firm claims several reliefs on CT, including partly paying some of its staff in share options and ‘adjustments’ from previous years. The share options relief slashed £22m from its tax bill last year.

The firm’s accounts, which are audited by US tax authorities over cross-border deals of its various subsidiary companies which are able to shift profits into tax havens and low-tax jurisdictions, may come under questioning by the Public Accounts Committee.

PAC chair, Margaret Hodge, said:

‘It is absolutely absurd if HMRC are doing business with companies that are not paying their fair share of tax.’

Accenture declined to comment on whether it paid royalty fees to its parent company in Ireland. It also declined to answer questions related to payments made from the British firm to low-tax jurisdictions, telling the Sunday Times that its arrangements complied fully with UK regulations.