Her Majesty's Revenue and Customs-HM Revenue and Customs or HMRC is a non-ministerial
department of the UK Government responsible for the collection of taxes, the
payment of some forms of state support, and the administration of other
regulatory regimes including the national minimum wage.
Four partners at the Belfast office
of KPMG have been arrested in connection with suspected tax evasion. HMRC officials
visited the global accountancy firm's city Centre office on Wednesday and
detained the men. They are Jon D'Arcy, Eamonn Donaghy, Arthur O'Brien and Paul
Hollway, the firm's most senior staff in Northern Ireland.
KPMG said it is cooperating with the investigation and the
four men have been placed on "administrative leave". The firm added
that it does not have "any indication that this investigation relates to
the business of KPMG or the business of our clients". The firm added that
it does not have “any indication that this investigation relates to the
business of KPMG or the business of our clients”.
HMRC said: “Officers arrested four individuals from Northern
Ireland [on Wednesday] in connection with suspected tax evasion. We can’t
comment further.”
KPMG has been at the fore of a
campaign to persuade the Treasury to grant Northern Ireland special corporation
tax status. Among the other KPMG executives arrested on Wednesday was Paul
Hollway who is the firm’s head of corporate finance in Ireland. Mr Donaghy is
KPMG's head of tax in Belfast and has been heavily involved in the campaign to
have corporation tax powers devolved to the Northern Ireland Executive. As well
as their work for KPMG, the four men are directors of a property investment
company called JEAP Ltd. The firm suffered heavy financial losses when the
property market crashed in 2008. However, it is unclear at this stage if that
forms part of the HMRC investigation.
Additional Thoughts
Tax evasion and tax avoidance are
issues which require the utmost care and attention from the auditors and
authorities as economy can suffer huge losses due to this. Auditors should be
very careful and should look out for transactions and other matters which may
indicate the possible tax evasion. Moreover while providing taxation consulting
services to its corporate clients the auditors should ask for all the pertinent
information from clients to avoid any chance of the possible tax evasion.
Sources:
- http://www.bbc.com/news/uk-northern-ireland-34931675
- http://www.theguardian.com/business/2015/nov/26/kpmg-partners-arrested-hmrc-tax-evasion-inquiry
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