Top taxman ditches civil service for mobile giant

The director of HM Revenue & Customs’ large business and employers customer unit John Connors has been poached by the Vodafone tax department, in a move that is said to have dismayed senior tax officials.

The move is believed to have shocked senior HMRC officials, some of whom are understood to have felt ‘betrayed’ by Connors’ surprise move to a company involved in a bitter billion-pound dispute with the taxman.

Connors is thought to have begun work at the mobile phone giant on Monday of this week as deputy group tax director. He will report to global tax boss Joel Walters.

The appointment is a major coup for Vodafone, who began a search for the position last autumn.

‘John brings deep leadership experience as well as a strong technical, operational and tax policy expertise gained in his service to HMRC, HM Treasury and in Brussels where he served as UK tax expert with the European Commission,’ Vodafone said in a statement.

Connors’ intimate knowledge of the workings of HMRC, where he spent 15 years, will prove invaluable to Vodafone as it prepares to fight off £2bn in unresolved tax claims.

Vodafone remains locked in dispute with the taxman over the Luxembourg subsidiary through which it acquired German telecoms firm Mannesmann in 2000.

Vodafone claims it is exempt from the Controlled Foreign Companies laws under which HMRC seeks to claw back profits diverted to lightly-taxed offshore subsidiaries.

The matter is currently awaiting a decision from the special commissioners.

Connors headed a review team as part of the Varney review of links with large business. The report’s key recommendations were extending the use of clearance procedures, shorter transfer pricing enquiries and the opportunity for companies to take intractable tax disputes to HMRC director general Dave Hartnett.

The principal beneficiaries of the changes are likely to be multinationals such as Vodafone.

A Vodafone spokesman explained that the appropriate procedures for the appointment of a senior civil servant had been followed.

Connors will almost certainly earn a much higher salary than he did at HMRC. When advertising for the position Vodafone said the incumbent would receive a six figure pay package.

Sir David Varney, the former chairman, earned £175,000 in his last year at the tax authority, significantly less than private sector figures can earn in similar roles.

A spokesman for HMRC said: 'All HMRC employees and former employees are bound by the statutory rules of confidentiality. People are inevitably disappointed when a well regarded and long-serving colleague leaves the organisation. As with most large organisations, there will be staff who leave to work for the private sector and similarly there will be staff we recruit who will have worked in the private sector.'