Thousands of businesses will have their corporate tax returns completed in India after Ernst & Young announced it would be the first of the big four firms to move its UK tax compliance work offshore. Ernst & Young plans to recruit 200 graduates in Bangalore over the next two years to perform the largely routine work of processing company tax returns.

The decision is likely to spark renewed fears about the threat to professional jobs from offshoring. But Ernst & Young said the move would not result in redundancies in the UK, as the graduate trainees who completed tax returns would be reassigned to other, more strategic, work.