Deloitte
Deloitte Touche Tohmatsu International - Deloitte - is an organisation of member firms around the world in accounting and financial and risk consultancy. Member firms offer services in audit, tax, consulting and financial advisory through a global client services strategy executed locally in nearly 140 countries.[1] The parent group is Deloitte Touche Tohmatsu.
Just four accounting firms – PricewaterhouseCoopers, KPMG, Deloitte & Touche and Ernst & Young – audit 97 per cent of FTSE 350 companies[2] and 99 per cent of the FTSE 100 on the London Stock Exchange. [3] In February 2013 all four firms were criticised by the UK Competition Commission for being "insufficiently independent" of the City.
Deloitte's clients include firms facing intense public backlash and scrutiny over tax avoidance allegations, such as Vodafone and Starbucks.
Contents
Controversies and conflicts of interest
According to Andrew Simms of the New Economics Foundation, "Conflicts of interest are built into the very DNA of the big professional services firms. These companies are working with firms that need to be regulated and the government bodies that are regulating".
Tax avoidance
The Big Four accountancy firms were behind almost half of all known [tax] avoidance schemes, the Revenue (HMRC) said in 2006.[4]
Secondments to the Treasury
In 2013 a report by the influential UK Commons public accounts committee found that the Big Four were using knowledge gained from staff seconded to the Treasury "to help wealthy clients avoid paying UK taxes". The firms, it said, went on to "advise multinationals and individuals on how to exploit loopholes around legislation they had helped to write".
PAC committee chair Margaret Hodge said the accountancy firms' actions represented a "ridiculous conflict of interest". She called for the Treasury to stop accepting their staff to draw up new tax laws. "The large accountancy firms are in a powerful position in the tax world and have an unhealthily cosy relationship with government," she said. [5]
Donations in kind
In the three years to July 2012 Deloitte gave £435,034 in staff costs and consultancy services to the Conservative Party and £13,500 to Labour, according to the Bureau of Investigative Journalism. Deloitte said:
- It is Deloitte’s policy not to give cash contributions to any political party or other groups with a political agenda. However, we do seek to develop and maintain constructive and balanced relationships with each of the main political parties and may make available staff and adviser resources, and technical and factual information on occasion. [6]
Former tax top dog through the revolving door
In late May 2013 it emerged that the Advisory Committee on Business Appointments (Acoba) and David Cameron had approved Deloitte's appointment of Dave Hartnett, the former head of UK's tax office HMRC for a one-day-a-week consultancy position. Hartnett had come under pressure over his 'sweetheart deals' with Deloitte client Vodafone which saw the firm pay only £1.25billion of an estimated £6billion due (a figure disputed by Vodafone).
A spokesman for Deloitte told The Guardian:
- Dave Hartnett will work as a consultant to Deloitte advising foreign governments and tax administrations, primarily in the developing world. He has significant experience in advising such countries on the development of effective tax regimes, necessary to ensure their continued economic growth. He will not work with UK companies or with HMRC. [7]
Govt should stop "playing to the gallery" on corporate tax
In August 2013 the head of Deloitte UK, David Sproul, made the claim that various companies advised by Deloitte had put on hold their plans to move operations to the UK because of the UK government's 'mixed messages' on tax. His comments in an interview with the Telegraph newspaper came on the same day the government launched a consultation on its proposals for hefty fines of up to £1million for 'cowboy' promoters of high-risk tax avoidance schemes.
Sproul argued that the House of Commons Public Accounts Committee’s (PAC) high-profile attempt to 'determine what the fair share of tax is' for large firms such as Starbucks and Amazon had caused a "pause" in some firms' thinking, despite recent tax changes favouring the corporate world such as a 20 per cent cut in corporate taxation by 2015, and changes to the controlled foreign company rules. Sproul explained that:
- They look at the PAC, they look at some of the media, and interpret that as lack of certainty,” he continued. If you’re in America, you would think that this Margaret Hodge [chairman of the PAC] seems to be setting the law.
- It does require the Government to be more consistent, so if they want to attract big business here, and they want to use a competitive tax regime as one of the planks of that attractiveness, then they need to deliver on that consistently and not frankly be playing to the gallery at times, and stop playing off the PAC arguments.”
People
- David Sproul -senior partner and chief executive of Deloitte UK
- Bill Dodwell - head of tax policy at Deloitte - gave evidence before the public accounts committee in 2013 [8]
- Dave Hartnett - former HMRC head of tax, now Deloitte consultant
Notable former employees
- Chloe Smith, UK Cabinet Office minister 2012-
Affiliations
Policy planning, think tanks, trade associations
- John Maxey and Paul Megson of Deloitte are members of the British Private Equity and Venture Capital Association Taxation Committee, which works to influence government policy on tax.
- In 2008, Deloitte & Touche is listed as a member of the American Benefits Council.[9]
- Institute of European Affairs, member
Lobbyists
- Westbourne Communications - as at November 2012
- APCO Worldwide [10]
MPs
- Deloite supplied Iain Wright, Shadow Minister for Competitiveness and Enterprise with an assistant free of charge in 2013 to help write Labour's business policy
Contacts
London offices:
2 New Street Square
London EC4A 3BZ
Athene Place, 66 Shoe Lane
London EC4A 3BQ
Hill House, 1 Little New Street
London EC4A 3TR
Stonecutter Court, 1 Stonecutter Street
London EC4A 4TR
Website: http://www.deloitte.com
External resources
- James Quinn, Companies spurn UK over taxation, says Deloitte boss Telegraph, 12 August 2013, 12.01am BST
References
- ↑ Deliotte Touche About Deliotte Touche accessed 31.01.07
- ↑ Prem Sikka, Called to account, The Guardian, 14 December 2008
- ↑ Prem Sikka, Auditors must be held to account, The Guardian, 31 May 2012
- ↑ Gilt-edged profits for profession's 'big four', Guardian, 7 February 2009
- ↑ Rajeev Syal, Simon Bowers and Patrick Wintour, [Accountancy firms 'use knowledge of Treasury to help rich avoid tax' – MPs] The Guardian, Friday 26 April 2013, acc 12 June 2013
- ↑ Maeve McClenaghan, |How ‘big four’ get inside track by loaning staff to government, Bureau of Investigative Journalism, July 10th, 2012
- ↑ Simon Neville, Deloitte appoints official criticised over 'sweetheart' tax deals, The Guardian, 27 May 2013 21.16 BST
- ↑ Rajeev Syal, Simon Bowers and Patrick Wintour, Accountancy firms 'use knowledge of Treasury to help rich avoid tax' – MPs, The Guardian, 26 April 2013, acc same day
- ↑ American Benefits Council Memberships Accessed 26th February 2008
- ↑ APPC Register Entry for 1 December 2010 to 28 February 2011
