Put on the spot over Patent Box - the UK's incentive which enables companies to apply a lower rate of Corporation Tax to profits earned after 1 April 2013 from its patented inventions and certain other innovations - ICAEW chief executive Michael Izza defended companies who took advantage of the rules, arguing that that the public often judged a company based on tax in respect of its turnover.

'But tax is paid on profit, which is declared after legitimate deductions... It is the government that put those incentives [such as Patent Box] in place... So when they [companies] take advantage of them it is pretty tough to be vilified.'

However panel member Sol Picciotto, emeritus professor of law at Lancaster University, said that while business argued that government set the rules, it is also the case that government sets the rules amidst pressure from business.

'In the UK we've introduced the Patent Box, and we've said we're just following other European countries and there's no agreement that it's a harmful practice. It costs the British taxpayer £1bn a year. That is hypocritical of the British government.

'There should be some pressure on the British government to say that Patent Box is a harmful practice. It's a clear tax break and they should just withdraw it,' Picciotto said.

Izza told delegates that it is incumbent on companies to make sure that the story on how they are operating is disclosed.

'Integrated reporting - a separate project - is about just that... So that one can clearly see how companies are creating value and tax is a component of that,' he said.

But Richard Murphy, head of tax research UK differed with Izza, saying that there was no trust in the profit figures that large conglomerates currently report.

'Many tax credits are simply not disclosed. What we have is an inappropriate accounting system - there is no information in the accounts about what is being given out in tax credits,' Murphy said.

The CBI's tax committee chairman, Will Morris, said he thought there's currently confusion as to what the aim of raising tax is.

'Some think it is to raise revenue, while others think it is to create jobs or help create opportunities for innovation. What is important is to make clear the overall position - countries clearly offer incentives whether through R&D or interest deductibility rules.

'In terms of what a company should do in telling its story, this includes when they're asking for things [such as tax reliefs] they should explain what they are getting and at least some of these [such as tax credits], should show up I the company's accounts.

'There needs to be a balance between that which creates jobs and doing that which people want.'

Meantime, the dispute over the legality of Patent Box is likely to be resolved at the upcoming G20 meeting in Brisbane scheduled for 15-16 November.

Speaking at a Berlin meeting of EU finance ministers held earlier this week [29 October], chancellor George Osborne discussed the issue with his German counterpart, Wolfgang Schaeuble.

Schaeuble said that the 'technical work is well under way' and expects that an agreement will be reached.

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