The tax office lacks knowledge of tax rules

[Crayfish]

 

Dave Hartnett: I have had concerns at various times that—if I can put it this way—I am the only commissioner in HMRC who has deep tax knowledge[...]

 

Stephen Barclay: Did you just say you are the only commissioner with tax knowledge?

 

Dave Hartnett: Deep tax knowledge. And there are six tax commissioners altogether.

 

Stephen Barclay: So for being a commissioner of HMRC, having tax knowledge is not part of the job spec.

 

Dave Hartnett: Well, we have many requirements of our commissioners. They are very talented people.

 

Margaret Hodge: Well, how on earth are they going to judge, if you do all the negotiation? You are now going to exclude yourself in the future from signing off those negotiations, but the people who are going to have responsibility have no understanding of tax. I would not want to sign them off. Lesley Strathie has no knowledge or qualifications on tax. If she will be signing off your work, that is not sufficient; that is not a check.

 

Dave Hartnett: No. Alongside what we decided to do on the back of the NAO Report, we will be appointing more commissioners—subject to the sovereign agreeing—who have tax knowledge. That is another step. If I may, I think this analogy is reasonable—forgive me if it is not. The commissioners will have advice; they will be able to check whether advice was taken; they could get advice from inside or outside the Department—so their position is a little like that of Ministers, who must make decisions.

 

Margaret Hodge: To take the Vodafone instance, where we know Vodafone had £2.2 billion, or thereabouts, in its accounts, set aside to settle tax disputes, you ended up getting something like £1.4 billion out of them—I cannot remember—much less than they had even made provision for. I am interested, as the Chair of the value-for-money Committee, in whether that loss of nearly £1 billion even from what Vodafone had in its account, set aside to pay tax, was value for money. I need tax knowledge to be able to assess whether the deal that you finally did was a good deal. It is crazy to think that someone like Lesley Strathie—and I have huge regard for her as a manager—can make that judgement.

 

[...]

 

Mr Bacon: I am staggered at so many tax commissioners not having deep tax knowledge. I am delighted that you are hoping to appoint more. Can you remind us who the other two tax commissioners are, apart from you and Dame Lesley?

 

Dave Hartnett: They are Steve Lamey, who is the director-general in benefits and credits, and Mike Eland, who leads our enforcement and compliance.

 

Mr Bacon: So we are talking about full-time employees of HMRC. The analogy of a non-executive director of a public company would not apply. These are full-time people, one of whose jobs is to be judge, jury, executioner and gravedigger on deals. You are rightly concerned that you are the only one with deep tax knowledge, which I find extraordinary. Only in this country could that happen. How many more are you seeking, with the sovereign’s consent, to appoint?

 

Dave Hartnett: Two.

 

Mr Bacon: And they will both have deep tax knowledge?

 

Dave Hartnett: One will have deep tax knowledge.

 

Mr Bacon: Will it be a future requirement that eventually they should all have deep tax knowledge?

 

Dave Hartnett: Our non-executive chairman has made it clear that his aspiration for our executive committee—I do not think he has expressed this in terms of commissioners—is that half would have deep tax knowledge. It is not like that yet.

 

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmpubacc/1531/1531.pdf

 

Pages EV13-EV17 are interesting reading. Dave Hartnett, the permanent tax secretary interviewed here, had 107 lunches, dinners etc. with large companies in one year, some of which he may have been personally involved in determining tax liabilities for (many company names were not made available to the committee due to "taxpayer confidentiality issues").

 

On top of that, during questioning it emerges that above and beyond these 107 annual lunches, he also regularly has coffee in his office with senior representatives from numerous companies, and they typically "bring a great gang with them from their firm". In these meetings he admits that often, no other HMRC employees or other witnesses are present.

 

It also emerges that in specific tax deals, companies have been charged less tax even than they themselves willingly set aside expecting to pay, to the tune of billions of pounds.

[mart]

I was just about to start a thread on this.

 

In the media that the inland revenue have been accused of bending rules to do favours for big firms at a cost of millions to the taxpayer then hiding the details from a watchdog. Of course, they will still chase you and I around the block for a few quid.

 

Just who can we trust?

 

It makes you wonder what else is happening on a grand scale that we never hear about because it eludes the media.

 

http://uk.news.yahoo.com/taxman-rapped-over-deals-firms-001532009.html

[taxman]

Unfortunately the knowledge of tax will diminish when Hartnett goes as he is the only one of Excom (who rule HMRC) with any tax experience whatsoever.

 

I posted about Dave's grilling by the select committee back in October.

 

You should see the "spin" we are getting on this story at work!

[oldprune]

Judging by the amount of time people who claim to work at the tax office spend on here I wonder how any tax is collected at all.

[mart]

Unfortunately the knowledge of tax will diminish when Hartnett goes as he is the only one of Excom (who rule HMRC) with any tax experience whatsoever.

 

I posted about Dave's grilling by the select committee back in October.

 

You should see the "spin" we are getting on this story at work!

 

I`m interested-do share;)