By Jonathan Davies

The accountancy firm PricewaterhouseCoopers (PwC) has been accused of promoting tax avoidance "on an industrial scale" by MPs.

The report from the Public Accounts Committee claimed that PwC helped hundreds of clients to set up bases in Luxembourg to enable them to avoid big corporation tax bills.

It claims that more than 500 letters were sent to tax authorities in Luxembourg on behalf of 300 international clients.

The accountants disagreed with the findings of the report, but said the tax system was "too complex". It follows comments from the Archbishop of Canterbury this week, who said companies should pay corporation tax wherever their profits are earned.

"We believe that PricewaterhouseCoopers's activities represent nothing short of the promotion of tax avoidance on an industrial scale," said Margaret Hodge, chairwoman of the Public Accounts Committee .

The report noted Basingstoke-based pharmaceuticals firm Shire, which paid just 0.0156% corporation tax on its profits after they were diverted to Luxembourg. The main rate of corporation tax in the UK is 21%.

Shire said it has always complied with tax obligations in the countries it operates.

"We consider that the evidence that PwC provided to us in January 2013 was misleading, in particular its assertions that 'we are not in the business of selling schemes', and 'we do not mass-market tax products, we do not produce tax products, we do not promote tax products'," said Ms Hodge.

In its defence, PwC said: "We stand by the evidence we gave the Public Accounts Committee and disagree with its conclusions about the work we do.

"But we recognise we need to do more to explain the positive role we play in the tax system and in helping businesses to operate successfully.

"We agree the tax system is too complex, as governments compete for investment and tax revenues.

"We take our responsibility to build trust in the tax system seriously and will continue to support reform."

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