Revenue's IT contractors accused of tax avoidance

Two leading IT contractors at HM Revenue & Customs have been drawn into the tax avoidance row, having been exposed by a Sunday newspaper for allegedly paying many millions less than they ought.

Accenture, which holds a £9.6m contract to provide technical support to HMRC, and Capgemini, the lead contractor on the Revenue’s £8bn Aspire contract, were identified yesterday in an article by the Sunday Times.

Pointing to the firms’ latest annual accounts, the paper claimed that Accenture managed to reduce its tax bill to less than 3.5%, while it said Capgemini was able to pay its liabilities at a rate of less than 1%. The standard rate of UK corporation tax is 24%.

Although both companies defended their respective payments – Accenture said it was compliant with UK regulations and Capgemini attributed the low rate to tax relief and losses, they have attracted condemnation from the Public Accounts Committee.

Reportedly speaking this weekend, PAC chair Margaret Hodge said: “It is absolutely absurd if HM Revenue & Customs are doing business with companies that are not paying their fair share of tax.”

   

Nov 26, 2012