PwC UK Chairman Sounds Warning Over Tax Uncertainty

by Jason Gorringe, Tax-News.com, London

10 September 2008

The chairman of PricewaterhouseCoopers in the UK has warned that the ongoing uncertainty over business rules caused by the government's stuttering tax policy is a major cause for concern for the firm's clients in the months and years ahead.

Announcing a 7% rise in the firm's underlying profits in the year to June 30, 2008, PwC UK chairman Ian Powell observed that the past year had seen "the toughest economic conditions seen for a decade," but while he was upbeat over PwC's prospects going forward, he expressed concern that ongoing uncertainty is sapping confidence from the corporate sector.

"In terms of the wider outlook, we share our clients’ concerns over the risks to the continued competitiveness of the UK economy," he stated.

"The quantity and scope of regulation combined with the level of uncertainty and complexity in this country’s tax system are particular causes of concern, and remain at the top of the agenda for leading UK-based businesses," he added.

Powell noted that the decline in business and consumer confidence has affected transactional activity and lowered the growth expectations for many UK and international businesses. However, in spite of the gloom, client demand for PwC's services remains strong.

“Our market-leading Assurance business continued to win new assurance clients and provided audit services to 39% of the FTSE 100 and 29% of the FTSE 250. In particular, risk assurance, due diligence and transaction related services and internal audit services experienced good demand," he disclosed.

Powell also stated that PwC's tax practice remains the leading tax business in the UK, and that the challenging economic and regulatory environment helped to deliver solid growth for the firm as it helped to guide clients through "the challenges of difficult and complex issues in an international economy."

Powell added that PwC's advisory business also achieved "very strong growth."

PwC's total profit for the financial year amounted to GBP675mn.

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