Cameron attacks accountants

The UK accountancy profession has been left reeling by Prime Minister David Cameron’s outspoken attack on the industry.

Speaking at the World Economic Forum in Davos, the PM dubbed the profession as being part of a “travelling caravan of lawyers, accountants and financial gurus” engaged in tax avoidance.

Michael Izza, ICAEW’s chief executive, who is attending the event at the upmarket Alpine Swiss resort, said:

‘As a profession we spend a great deal of time working with policy makers to achieve this balance. Which was why I was disappointed to hear the Prime Minister again dismiss accountants, this time as an “army” of avoiders. ‘We don’t recognise that description. Our members do not support illegal tax evasion or the kind of aggressive tax avoidance that we believe to be unethical. In fact, an effective accountancy and finance profession can and does help solve many of the problems the Prime Minister wants to address.’

Izza stressed that accountants play “a key role in making the UK’s tax system work”.

‘Professional accountants everywhere are helping their clients pay the right amount of tax to the right governments at the right time.’

‘It’s true, as the PM says, that countries without this professional capacity struggle to collect the right amount of tax. Which is why ICAEW is working in places like Nigeria to help tackle the problems outlined in the speech this morning.’

Cameron was quick to defend “sensible tax planning” explaining that there “are some things governments want people to do to that reduce tax bills, such as investing in pensions, start-up businesses or charities”.

But he said avoidance was “an issue whose time has come”.

‘After years of abuse, people across the planet are calling for more action and most importantly, there is gathering political will to actually do something about it.’

‘In the UK we’ve already committed hundreds of millions into this effort – but acting alone has its limits.’

‘Clamp down in one country and the travelling caravan of lawyers, accountants and financial gurus just moves on elsewhere.’

‘So we need to act together at the G8.’

‘If there are difficult questions about whether existing standards are tough enough to tackle avoidance, we need to ask them.’

‘If there are options for more multi-lateral deals on automatic information exchange to catch tax evaders, we need to explore them.’

A furious Izza said the PM “would also do well to remember the accountancy profession employs a quarter of a million people in the UK alone, generating more graduate jobs than any other sector.”

In a final defiant riposte, Izza added:

‘My message is simple. Our profession is part of the solution: promoting trust and confidence in business at all levels. It is time the PM stopped castigating this vital economic sector and recognise just what we contribute to growth.’

Francesca Lagerberg, tax partner at Grant Thornton, said:

‘'Once again tax is on the agenda but the key here is international co-operation. To make sensible changes that satisfy the calls for transparency and 'fairness', it needs countries to work together to reach solutions. No single country will want to drive business away by acting unilaterally in law changes. It needs a global approach.’

Doug Sinclair, head of tax investigations at UK200 Group member firm Berg Kaprow Lewis, was equally affronted. He said:

‘Once again, David Cameron has sought to bring a moral dimension to the issue of tax avoidance. Last year it was individuals who were subject to David Cameron’s moral compass, now it is the turn of global companies who would have taken extensive accountancy and legal advice to ensure they stayed within the letter of the law regarding their UK tax obligations.’