Re: TL;DR they were badly advised by their own accountants ?
I'm not sure on the specifics here but "accountants take no responsibility if they make a mistake" is definitely not true. That's why indemnity insurance exists for accountants.
8 posts • joined 10 May 2013
"Casual car hire company Uber is teaming up with Spotify, ensuring neither your favourite musicians nor your driver get paid very much."
This doesn't seem very fair - the driver'r price is because of the market, not Uber. The Spotify point I'd agree with but it isn't a cause that triggers much emotion in my heart.
The reality isn't quite like this. In HMRC's defence they're operating in a world where the investigation of these issues takes a large amount of money and time, and often cutting a deal is the best answer for everyone. 5 years of investigation and then a court case cost millions. Yes it is true that the cost of investigation should not be a deterrent but when the "grey area" for these cases is so large it doesn't tend to benefit either party. Also they want to be seen as pragmatic and not bureaucratic in the eyes of international business. They also have to operate within the global matrix where our 'allies' like The Netherlands and Ireland creating laws and systems to undermine the British system of corporation tax.
Of course it can be done better but they're a government department and the government sometimes do everything they can to make life difficult.
"Is that they are paid by the company they are auditing, therefore they have to make themselves attractive to the company in order to get the work."
Incorrect. External auditors are appointed by the sharesholders to scruitinse the directors on their behalf. There is regulation around rotation of auditors and audit partners to prevent familiarity and what you highlight above. Your point is still valid as obviously the shareholders want to minimise tax and maximise dividends; but not illegally like a director would/could. HMRC/UK Gov will be using the report from E&Y to the shareholdersas a basis for tax calculation validation, but this is not the purpose of the report - it's just something easy for them to use. E&Y will be making this point repeatedly when appearing in front of the PAC.
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