Accountancy firms eye legal licence that could bolster secrecy UK accountancy firms are eyeing a new legal licence that could give their services an additional layer of secrecy, fuelling controversy over tax avoidance schemes. The Institute of Chartered Accountants in England and Wales said 20 to 25 of its member firms had expressed an interest in applying for an "alternative business structure" licence . Those examining the issue include some of the "Big Four" audit and consulting companies that dominate the profession. ABS licences are part of a drive to open up the UK's £23bn legal market to new competition under the Legal Services Act. The change permits third-party investment in law firms and allows companies that are not law firms to offer legal services. As well as allowing accountancy firms to compete more directly with solicitors, an ABS licence would allow them to refuse to show documents to tax inspectors in certain situations. This is because tax work done by an ABS would qualify for "legal advice privilege" if a lawyer is involved in at least a supervisory role. Any such extension of legal advice privilege to accountants could inflame an already heated debate over the role of the profession in helping companies to minimise their tax bills. The accountancy firms that are weighing up whether to apply for the new designation include the UK arm of KPMG, the country's third-biggest auditor and consultant by fees. PwC, the market leader, said it was also examining the issue. It already has an affiliated law firm in the UK. EY, the number four accountant, said it was keeping the matter under review. The Big Four have been criticised by MPs examining corporate tax avoidance this year. KPMG acknowledged that it would benefit from the extra confidentiality "in specific limited circumstances" if it secured an ABS licence. However, it said that its interest was not motivated by a desire to hide from the taxman, but by the potential for offering clients additional legal services. We have been providing clients with tax advice without privilege for many years. That's not a driver," the firm said. Accountants feel that lawyers who provide tax advice have an unfair advantage. A Supreme Court ruling in January upheld the principle that accountants could not benefit from the legal advice privilege enjoyed by solicitors doing the same work. The ruling related to a case in which Prudential, the insurer, did not want to disclose to HM Revenue & Customs documents related to tax avoidance advice supplied by PwC. "It would be good to have a situation where there is a level playing field," said Simon Michaels, managing partner of the UK arm of BDO, another accountancy firm. BDO is weighing up its options for potentially securing legal advice privilege, Mr Michaels said. Deloitte, the second-biggest auditor and consultant, said it had no plans to apply for an ABS licence, however. International accounting networks experimented with running affiliated law firms in the late 1990s and early 2000s, but the diversification largely fizzled out in the tighter regulatory climate that followed the collapse of Enron. Additional reporting by Caroline Binham