One of the UK's biggest accountancy firms has been accused by a senior MP of selling tax avoidance for clients on an "industrial scale" through deals set up in Luxembourg.
The chairman of the Commons Public Accounts Committee Margaret Hodge accused Kevin Nicholson, the UK head of tax at PricewaterhouseCoopers (PwC), of having "lied" when he previously said the firm did not "mass market" tax avoidance schemes.
During a bad-tempered committee hearing in the Palace of Westminster, she suggested that one of PwC's clients - Shire Pharmaceuticals - had engaged in "fraud" through its use of a Luxembourg subsidiary to shield its profits from tax.
The hearing followed the leak to a number of media outlets - including The Guardian in the UK - of 548 letters written by PwC to the Luxembourg tax authorities relating to "schemes" concerning 343 of its client companies.
Mrs Hodge said that if the documents had come to light when former Luxembourg prime minister Jean-Claude Juncker was running to become president of the European Commission, he may well not have got the job.
"Since I have uncovered all this I have questions as to whether Mr Juncker is actually fit to be President of the European Commission," she said.
"I think if this had been around during the period of his appointment I think it might well (have been) a different decision."
Mrs Hodge said that given the number of letters written by PwC to the Luxembourg authorities, she found it very hard to accept Mr Nicholson's evidence to the committee earlier this year that it did not "mass market" tax avoidance.
"I think what you are doing is selling tax avoidance on an industrial scale," she said.
"Mass marketing means you have a scheme which you market to a whole lot of different companies. That's what you've been doing and that's what you denied which is why I accused you of lying and I don't do that lightly."
Mr Nicholson, however, insisted that he stood by his earlier testimony.
"They are all different. They are not schemes by any sense of the imagination. These are individual companies over an eight year period, all of whom need financing," he said.
"They are mostly large sophisticated businesses with very complex arrangements. This is not like buying a dress in Marks and Spencer."
Committee member Stephen Phillips said that in the case of Shire the deal set up by PwC had meant that the firm paid an effective corporation tax rate on its profits in Luxembourg of just of 0.0156%.
Fearghas Carruthers, Shire's head of tax, told the committee that they had just two full-time staff - out of a worldwide workforce of 5,600 - managing intra-company loans of 10 billion dollars.
Mr Phillips said that despite the Luxembourg office having generated profits of 1.87 billion dollars over five years, it had paid just two million dollars in Luxembourg taxes.
"It is obviously a shell. There is no substance there," he said.
Mrs Hodges added: "It is a very serious matter because if the decisions in substance aren't taken in Luxembourg this isn't just avoidance, for me it's fraud."
She told Mr Carruthers: "It is because these medicines are so important that we feel such huge offence at the way in which you have scammed the British public. The way in which you conduct your business is outrageous."
Mr Carruthers insisted that all decisions relating to the Luxembourg subsidiary's operations were taken in Luxembourg. He said the company needed a vehicle to finance it programme of acquisitions which had enabled it to expand and that it complied fully with tax rules.
"Shire paid 1.4 billion dollars in corporation tax over last five years. The commercial purpose is to allow us to have a treasury operation in Luxembourg which finances our activities. The commercial purpose is to have an efficient financing vehicle," he said.