YESTERDAY'S Public Accounts Committee report into HMRC's big business settlement strategy has been widely regarded as a damning indictment. While this is true, there are very few conclusions to be made and it is clear that this is a few shots in a far longer war between the MPs and HMRC.

There have been headlines of an unpaid £25bn tax bill by big business, with Vodafone underpaying by £4.75bn and Goldman Sachs underpaying by £20m. While understandable, these headlines are not helpful, and the MPs stop short of making such accusations.

The most consistent criticism throughout the report is HMRC's lack of willing to offer more information. Indeed, after reporting the numbers, the report says: "Our understanding of how [the Goldman Sachs] case was settled is inhibited by the imprecise, inconsistent and potentially misleading answers given to us by senior department officials, including the permanent secretary for tax [Dave Hartnett]."

The lack of information means that the conclusions of whether the taxman has been settling for less than it should with big business are not as strong as they could be. With this vacuum, it is not unfair for the MPs to suggest how much could be lost, but they are only suggestions.

Another accusation from the MPs is that HMRC is taking confidentiality too far. The pressure on the department might make senior officials less inclined to go beyond the call of duty to keep details of agreements private.

The forthcoming judicial review by UK Uncut, if it takes place, will clarify how much the taxman is able to disclose about confidential agreements. If HMRC does not think it has much to hide in the way it settles disputes with big business, then it might well want to lose the judicial review.

Otherwise, this dispute between HMRC and the PAC (and this is definitely a dispute) will continue to run. And the drip feed of information through whistleblowers and sterling work from Private Eye will be far harder to counter than if it were released through legislative channels.

THE ANNOUNCEMENT that Dave Hartnett is to step down as permanent secretary for tax seems obvious in hindsight. The weight of the further damaging revelations about the Goldman Sachs deal has become too much and his retirement is best for all parties.

Of course, this is being spun in a different way by HMRC. Incoming HMRC chief executive Lin Homer said she was pleased that he agreed to stay on for another year. True, he will be 61 next summer, and past the retirement age for civil servants. But Hartnett still has hunger for the job. In Public Accounts Committee meetings, he has been vocal in announcing his achievements in bringing revenue in through targeted campaigns and he recently told the MPs that he was not going to quit any time soon. 

Hartnett's retirement date was unlikely to be of his choosing. Rightly or wrongly, his reputation was becoming awkward for ministers. The chancellor's Autumn Statement was derided by the Institute for Fiscal Studies for adversely affecting the poorest in society more than any other group. With the very real allegation that the policy-making arm of the Treasury favours the rich, the continuing headlines of an investment bank being let off interest payments by HMRC are a headache that ministers do not need.

It also seems that UK Uncut's protests against the Goldman Sachs and Vodafone deals have hit a nerve with the public. A general protest against capitalism - even confined to excessive capitalism - is vague and is unlikely to garner support, but the group is most successful when targeting specific injustices. Its threat of a judicial review to explore the legality of the Vodafone deal was a smart ploy and put extra pressure on Hartnett that was more real than invading a conference.

The problem with Hartnett leaving is that it does create a vacuum at the top. Transport insiders say that Lin Homer, HMRC's new CEO, was quiet when in charge of the DfT and she has no experience of tax. Stephen Banyard, the only HMRC commissioner with tax experience outside of Hartnett, is not a major personality. The sheer force of Hartnett's personality has made him synonymous with the department.

Would this lack of force at the top be a bad thing? Arguably not. Hartnett has been acting like a minister in a non-ministerial department. But it is not necessary to have this kind of figure at the top. The taxman should be a sober, dull figure. Maximising revenue is essential, but this does not require a figurehead.

This is not to denigrate Hartnett's achievements. The move to compliance, and the revenues received through his various initiatives - not to mention the Swiss deal - should be congratulated. But an HMRC without the colour he provides might be a good thing in these austere times.

HAVING been caught up in the students' protest in the City of London(which made me late for the Lexis Nexis Tax Journal conference), it made it all the more fascinating to see permanent secretary for tax Dave Hartnett's speech at said conference interrupted by UK Uncut protestors.

In the cold light of day, the Hartnett protest was good natured, and, similarly, the education protestors have every right to make their voices heard. Having minor disruptions is a small price we pay for the right to protest.

But, for me, I simply cannot agree with the Hartnett protestors and there are a few questions I would like UK Uncut to answer: first, how could it be in Hartnett's interests to allow big business to "get away" with it?

As I have said before, 99% of the population want to see big business paying its fair share. Call me naive, but surely HMRC wants this more than most? That is certainly what big business advisors, many themselves critical of Hartnett, would claim. And Hartnett is judged on his record of bringing money in. To let big business "get away with it" would be against his own interests in so many ways. His explanation that an error was responsible sounds far more convincing. A free lunch is not enough to make a top civil servant jeopardise his position. Hartnett could conceivably have been negligent in the whole affair, but it is highly unlikely he acted improperly.

Second, at a time when public services are being cut, and Home Secretary Theresa May called on the Border Agency boss to quit over the borders scandal, does UK Uncut really feel it is right to attack a public servant? Sure, protest against politicians and policies, but civil servants are bound by confidentiality, their minister's whim and are constantly in danger of being made scapegoats.

Finally, what would happen if he leaves? With the sad news about Dame Leslie Strathie having to leave for health reasons, there is less experience at the top. There have been two more commissioners appointed this week, one with tax experience. But if Hartnett leaves, there will again be one tax commissioner. It seems a terrible time to remove more tax knowledge at the top, and big business could find it even easier to reduce tax bills.

There are two major potential counterpoints to this. First, Hartnett must still be accountable for his performance. But his accountability is to Cabinet secretary Gus O'Donnell. This might not sound particularly satisfying, but it comes back to the fact that Hartnett is a public servant. His role is accountable to his line manager (previously Strathie) like any other job. O'Donnell has said he is happy with Hartnett's performance.

Secondly, and more importantly, HMRC as a department must be more accountable. The issues behind this are complicated. As a non-ministerial department, accountability lines are blurred. It is far more preferable that it remains so - otherwise we end up in the situation where politicians, who would have far more vested interests, are able to use the tax system to help friendly organisations and punish enemies,as Richard Nixon used it for.

But the accountability it currently has is not acceptable. It is up to Parliament to give it more accountability. O'Donnell this week said it would be strengthened, and it will be interesting to see how the government - namely, ministers and the civil service - intend this to happen.

A report in the Times today also suggested that the National Audit Office was considering asking the judiciary to look at the Vodafone and Goldman Sachs deals. If this were the case, then it is a welcome step to provide more accountability and if Hartnett was found to have acted improperly, he should leave. But it should also call into question the role of the NAO. It was only through good journalism that the deals came to light. Surely the NAO should have flagged up the errors more publicly?

UK Uncut's action was effective and, dare I say it, imaginative. But if it is targeted at civil servants, who cannot currently answer back effectively, then it does not sit well.

WATCHING Prime Minister's Questions yesterday, there was a strong tax element - discussions about the financial transaction tax, the bank levy and benefits to SMEs.

David Cameron was, fairly enough, asking Ed Miliband what Labour's growth strategy involved. The prime minister launched into a list of this government's actions: the bank levy, the lower bank bonuses, the higher fees on non-doms and the agreements with Switzerland and Liechtenstein.

Hold on a minute, I thought. The Swiss agreement might have its seeds in the Labour government, but it is fair enough for the Conservatives (and lest we forget the LibDems) to claim credit.

But Liechtenstein? The Liechtenstein Disclosure Facility was brought into being in 2009 and signed by a Labour minister - Stephen Timms. This was not an initiative by this government.

Cameron's researchers have made a gaffe here, but it does highlight the success of the LDF. It has brought in the revenue and the next set of figures to be released - the first ones since the announcement of the Swiss deal - will be fascinating. It is likely to be the flood that follows the hitherto satisfying drip of disclosures.

Ownership of the LDF is highly desirable. Probably best for our prime minister not to steal it, however.

AS A tax journalist, it makes me feel uncomfortable defending HMRC. But, like the PAYE reports last week, HMRC does have to put up with an awful lot of misreporting. It's not as though there are not enough genuine criticisms around, after all.

This week, the beleaguered taxman has to face yet more criticisms of the Swiss tax deal, this time from the Tax Justice Network. It identified several loopholes, such as the use of discretionary trusts and insurance wrappers.

These claims might have some merit, but a more detailed analysis is required. But even if the claims are correct, they do not lead to the conclusion - that the deal is bad for the UK.

The deal has to be looked at in two ways: first, that the evaders will not like it, despite reports to the contrary. The most aggressive evaders will find ways around the deal, most likely through moving their money to another jurisdiction or arrange the account in a different way. Neither of which is preferable to doing nothing. Crucially, if they do attempt to avoid the charges, they will not be protected by the provisions - they will still be fair game for the Revenue. They will have gained nothing but the requirement to make their arrangements that little less secure than they were in pre-deal Switzerland.

Second, any money brought in will be extra money for the Exchequer, which is not a bad thing.

The TJN report claims that more money would have been brought in had the UK continued pushing the EU Savings Directive. But it adds: "Although the original directive is full of loopholes and has only collected a small fraction of the originally envisaged sums, it is a long-term work in progress."

So why will the new directive be any different? And why does the TJN not look at bilateral deal from a long-term perspective?

This is part of a worldwide effort to tackle avoidance. Now it's Switzerland, tomorrow it will be Singapore, then Bermuda. This is simply one link in a chain, a link that is generating money on the side. The most determined evaders will run when they are chased, but this is true with whatever mechanism is used to increase transparency. Eventually, human nature dictates that the majority will tire of running.

The TJN, HMRC and 99% of the population are on the same side - we all want the wealthy to pay their fair share. This is the way HMRC think is the best way to collect revenue from Switzerland and to take forward the worldwide fight against evasion: and they have put a convincing case forward.

Ironically, some of the only people who are not on the same side are probably the Zurich tax advisors, who form a large part of the sources quoted in the report...

DAVE HARTNETT's appearance at the Public Accounts Committee did not follow the agenda he might have expected at the start of the week. The allegations about his role in a settlement with Goldman Sachs over the investment bank's dispute involving employee benefits trust took centre stage.

Leaked documents appeared to show that the two parties struck a deal despite HMRC counsel informing Hartnett that HMRC has a strong case to obtain the full amount of tax due. If the deal was struck, this would be contrary to HMRC's litigation and settlement strategy and court rulings, which state that HMRC cannot go for less than 100% of the liabilities in strong or "all or nothing" cases. The deal cost £10m according to the documents.

Hartnett admitted there had been an error in calculating the liabilities. Amyas Morse, the auditor general, said that the NAO calculated this error to be worth between £5m and £8m.

So what was this error? Well, we don't know. Hartnett used the taxpayer confidentiality defence as well as England cricketer Alastair Cook, to paraphrase a similar grilling by MPs two decades back. Indeed, if it wasn't for Morse's presence, we would not know the value of the error.

Jesse Norman, a Conservative MP on the Treasury select committee, has called on Hartnett to resign. But the permanent secretary for tax's defence, although not pretty, might have done the trick in saving his job. An error is far more forgivable than willfully giving a big business special treatment. As hard as they tried, the MPs were unable to budge him from his confidentiality defence and were unable to prove a deal had been struck.

The other accusation around the Goldman Sachs deal was that HMRC departed from its usual governance procedures. This is undoubtedly true. Commissioners who are involved in negotiations with a big business are not allowed to sign the deal off.

Hartnett claimed that he was not involved in the tax affairs of Goldman Sachs. But this is him playing with semantics. He did attend a meeting with representatives of the bank to help facilitate a poor relationship, he said and then signed the deal off.

Why was he personally so involved in each aspect of the deal? Because, remarkably, he is the only one of the four HMRC commissioners with tax experience. Errors should only be likely in complicated cases and, as he is the only one qualified to deal with complicated cases, he is essential for HMRC right now.

The health situation with Dame Leslie Strathie is not great and her sick leave is likely to be prolonged, sadly. That leaves not only three commissioners, but a power vacuum at the top. As well as this, many of the top jobs at the Revenue are being filled on a temporary basis. If Hartnett was to be forced out, it would make a bad situation even more unstable.

By sticking to the error story, Hartnett is not only attempting to quash allegations of a deal, he is almost implicitly drawing attention to the lack of expertise at the top. As the only font of tax knowledge during a precarious power vacuum, ministers would be loathe to get rid of him right now. Of course, this will all change if it can be proved a deal took place.

THE CRACKDOWN on private tutors by HM Revenue & Customs has to be welcomed.

Evasion should not be tolerated and it is a pragmatic approach to target professions and industries where first, the opportunities for evasion are greater, and secondly, where information is more available.

The Tax Health Plan has done well, but few would argue that the Plumbers Tax Safe Plan has been a success, with only £328,000 collected through voluntary disclosures.

But there is a trend developing in the taxman's - wrongly-named, but for want of a better word - amnesties. The first few campaigns, such as the offshore disclosure facility and the THP, were based on hard information that had fallen into HMRC's hands. As such, HMRC held all the cards and could play any hand they wanted, knowing they had the information to catch evaders.

But the two most recent campaigns - plumbers and tutors - are examples of HMRC pro-actively finding the information for itself. In the case of plumbers, it looked into Gas Safe registered plumbers; for tutors, as revealed by Accountancy Age, it is issuing Section 16 notices. The tutors campaign differs from the plumbers campaign in that it is not even working in conjunction with the professional bodies. By issuing the notices, it is burdening colleges.

So what should be taken from this new aggressive approach? HMRC is being smarter in its campaigns and is showing more confidence. This suggests that there will be new initiatives announced at a more alarming pace as the requirement for easy information is no longer there.

Perhaps more importantly, the carrot is becoming far less important than the stick. Because there seems to be less information readily available, HMRC is perhaps not as expectant that people will be frightened enough to come forward, evidenced by the £328,000 garnered from voluntary disclosures from plumbers. Therefore, the "amnesty period" is short and the publicity is not as persuasive.

The £1m single payout made by a doctor will not be repeated. But the arrest of five professionals is likely to be far more common.

THE PUBLICISING of the National Insurance holiday scheme by HMRC today is perhaps not surprising. As one of the headline policies from George Osborne's first Budget, it was expected to help boost new businesses.

Unfortunately, to say it didn't do this is an understatement. The original projections for the policy expected 132,000 businesses to take up the incentive. They didn't quite achieve this. In fact, only 6,000 have applied for the scheme.

The scope of the scheme - which can only be taken up in certain regions in the country - seems to be one of the culprits for the poor take-up. There is an argument that if the government was serious about the scheme, it would have been a UK wide initiative.

But there may be a broader reason than this. The 144,000 businesses that are receiving letters from HMRC are eligible for the scheme. But there is a big difference between being eligible for the scheme and actually taking the plunge and hiring an employee. It is wishful thinking on the part of the government that a £5,000 relief will be the deciding factor for businesses making this decision. A few thousand letters will not change this fact.