Businesses cannot be left to themselves in the “tax jungle” according to Dave Hartnett, HMRC’s Permanent Secretary.
Dave, fresh from a Blair-like pan-global tour during which he has been pushing brand HMRC (UK) to the far ends of the earth (well, China) was speaking at the ICAEW’s 2009 Hardman Lecture.
His topic for the evening was “Tax, transparency and trust” but his lack of trust in all around him became obvious when he spoke out against advisers who dabble in what he termed as “tax alchemy”: those who seek to turn taxable income into capital (and therefore take advantage of the 18% capital gains tax rate). Moving on he suggested that firms might like to receive secondments from HMRC, but with the caveat that only if firms are willing to open up all their systems to secondees. It seems questionable whether trust will ever stretch that far, and of course there are the client confidentially issues too.
He managed to alienate at least the other 95% of the attendees by marking all tax advisers (and journalists!) as tax evaders.
It is clear that the chip on Dave's shoulder derives from his experiences as a district inspector. He did not refer to his failed attempts to control the tax departments of some of the UK’s biggest businesses.
Anne Redston, visiting Professor at Kings College, London was quick to criticise his views on tax advisers in question time. However, his response that “HMRC is committed to helping unrepresented tax payers and advisers who have not kept up with CPD” fell wide of alleviating Anne’s or anyone else’s concerns.
