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.

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.