HMRC criticised for 'cosy' deals by committee of MPs

[dutchman]

A committee of MPs has criticised "cosy" deals between HM Revenue & Customs (HMRC) and firms that absolve them from millions of pounds of tax.


Chief tax collector Dave Hartnett

The Public Accounts Committee said it had "serious concerns" about how some large settlements were reached.

The MPs believe there is £25bn of outstanding tax issues with big companies and wants HMRC to be more open in its dealing with large firms.

HM Revenue & Customs said the MPs had misunderstood the facts.

The committee singled out Dave Harnett, permanent secretary for tax, for failing to handle tax negotiations with some big companies properly.

A spokesman for HMRC hit back, saying the MPs were simply wrong to call Mr Hartnett's honesty into question.

"The report is based on partial information, inaccurate opinion and some misunderstanding of facts," the spokesman said.

"The idea Dave Hartnett cuts a large tax bill in return for a glass of wine and a cheese sandwich is just plain nonsense.

"If he was interested in feathering his nest he would have accepted one of the many highly lucrative offers of work he regularly receives from the private sector," the spokesman added.

Stonewalling

The report by the committee contains some of the most severe criticism of a civil servant yet published.

The MPs accuse Dave Hartnett of mishandling tax negotiations with some big companies like the bank Goldman Sachs, letting it off millions of pounds in interest on its tax bill.

He had also, the MPs said, tried to stonewall their questions when they quizzed him at committee hearings during October and November this year.

The MPs say he:

* authorised a large tax settlement whose negotiation he had been involved in, breaching HMRC's internal rules
* had given "imprecise, inconsistent and potentially misleading answers" to MPs
* had relationships with big companies that were "too cosy", resulting in the appearance they received "preferential treatment"
* had used a bogus excuse of observing taxpayer confidentiality to avoid explaining the tax deals he had been involved in.

Margaret Hodge MP, chair of the Public Accounts Committee, said: "This report is a damning indictment of HMRC and the way its senior officials handle tax disputes with large corporations."

"Having looked at the two cases in the public domain, we are concerned that many millions of pounds may be lost to the public purse," she added.

An HMRC spokesman said Mr Harnett had answered questions strictly in line with the advice of the tax department's lawyers, which legally restricted how much he could reveal about individual tax cases.

In early December Mr Hartnett announced he would be retiring in the summer of 2012.

[dutchman]

Hartnett will probably accept a cushy job with one the giant corporations he allowed to evade tax and there is nothing the government can do about it!