Tax row sours Treasury relations with business

The dispute also appears to have heightened tensions between Treasury officials and the political appointees whose advice is said to have influenced chancellor Gordon Brown, according to a report in the Financial Times.

Officials said the row was avoidable and pointed to politicians lack of experience. The row over mixer companies had also lead to internal rows between Treasury officials, who felt the mixer dispute was avoidable.

Former Arthur Andersen accountant Chris Wales, recruited by Labour and believed to be a key advocate of the mixer proposals, came in for particular criticism.

According to the report, the Treasury was very irritated by the claims by some firms of accountants that the mixer rules would lead to far higher damage to business than would actually be the case.

The Treasury’s annoyance came to a head when the chancellor appeared on the BBC television programme Breakfast with Frost and made a personal attack on PricewaterhouseCoopers’ partner Peter Wyman who had claimed the cost to business of the mixer rules would be at least 10 times more than the Treasury’s estimates of £300m.

Experts give limited welcome to mixer climbdown

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