PwC chief set for grilling over tax schemes

A senior tax official at PwC is to be questioned by MPs over the fine points of controversial tax deals in Luxembourg.

The UK head of tax at PricewaterhouseCoopers (PwC) is to face the House of Commons public accounts committee next month over the controversy concerning tax deals for British and Irish clients in Luxembourg.

Kevin Nicholson will be questioned by MPs on December 8th, amid claims that PwC was involved in aggressive avoidance schemes using loopholes in the Grand Duchy's corporation tax system.

The issue arose after a series of newspaper revelations and has also put the spotlight on the role of new European Commission president Jean-Claude Juncker, who denied being responsible for the flaws in Luxembourg's tax system, despite serving as the country's prime minister from 1995 to 2013. He survived a vote in the European Parliament this month on a motion claiming this made him unfit to lead the Commission.

During his time in office, a number of major companies moved some of their financial operations to Luxembourg. He claimed that the tax evasion-friendly regime he was alleged to have helped create "doesn't exist".

If the appearance of Mr Nicholson is a prelude to further tightening of tax laws, accountants seeking work with major companies may find they need to be particularly aware of the very latest legislation, both in the UK and Ireland, as well as on the continent.

The big four accountancy firms have been under particular scrutiny, with chair of the public accounts committee Margaret Hodge accusing them in the past of being involved in aiding aggressive tax avoidance efforts. She said "protestations of innocence" were unjustified as they continued selling such schemes with "as little as 50 per cent chance of succeeding if challenged in court”. 

Mr Nicholson appeared before the body last year to give evidence and a PwC spokesperson said: “We stand by the evidence we gave to the public accounts committee in January 2013 and are very willing to clarify any of the points made.” 

Over 340 global companies have been accused of using the Luxembourg system to dodge tax.