Top KPMG partner quits after tax cheat charges

Patrick McCoy, the head of investment advice and fiduciary management at KPMG, stepped down days after being named as one of ten people facing criminal charges for allegedly cheating the taxman.

The Times reports that KPMG, which is an adviser to the Treasury and some of the country’s largest businesses, confirmed yesterday that one of its “former partners” had left the company after an investigation by HM Revenue & Customs into his “personal tax affairs”.

Mr McCoy, along with his nine co-defendants, who include City bankers and financial advisers, are accused of using a firm called Zeus Partners to avoid tax through a complex scheme that involved investments in film productions.

“The individual concerned is no longer a partner of the firm. It should be stressed that the matter does not relate to client work conducted by the partner or KPMG or to KPMG’s own affairs,” a spokesman for the firm said.

According to Companies House, Mr McCoy resigned as a director of KPMG LLP on January 13, two days after he had been charged.
The charges facing Mr McCoy are the latest tax scandal to hit KPMG after four senior partners in its Northern Irish business were arrested in November on suspicion of evasion after an HMRC raid on the firm’s Belfast office.

Jon D’Arcy, Eamonn Donaghy, Arthur O’Brien and Paul Holloway were arrested and placed on “administrative leave” by KPMG pending the outcome of HMRC’s investigation into suspected tax evasion.

News of Mr McCoy’s departure came as officials at the Financial Reporting Council, the accountancy watchdog, met to discuss whether to launch an investigation into KPMG’s work as HBOS’s auditor in the run-up to the lender’s collapse in 2008.

KPMG had seemingly avoided a full FRC inquiry into its audits of HBOS after the watchdog said two months ago it had found no “reasonable grounds” to suspect misconduct in its role, despite the damning findings of a report by the Prudential Regulation Authority and the Financial Conduct Authority.

However, the accountancy body said that it would review this decision and its conduct committee was set to decide on giving the go-ahead for a new inquiry.