The permanent secretary for tax and commissioner of HM Revenue & Customs
has never been afraid of ruffling a few feathers and Dave Hartnett did not
disappoint at a recent address to some of the UK’s most eminent tax advisers.
Hartnett set out plans for a higher level of trust between the taxman,
corporates and advisers at the ICAEW’s annual Hardman lecture but hit out at
those still looking to cheat the UK’s tax system.
Although his speech was entitled Tax, Transparency and Trust, he still took a
swipe at those salting away income in offshore tax centres.
“Few people put their money in Caribbean tax havens because they are looking
for excellence in fund management,” he said. He also hit out at some advisers.
“What are we to make of the alchemists at work at the moment turning lead into
gold or in this case income into capital managing incredibly carefully what
HMRC learns about their activities.”
The mood in the audience was decidedly frosty and Hartnett was taken to task
for what experts saw as a heavy handed-approach that would harm those genuinely
looking to clarify their tax affairs.
“There are serious concerns about the extensive powers HMRC is asking for and
the effect on the ordinary person or adviser,” said Anne Redstone, visiting
professor at Kings College, which generated applause from the audience.
Hartnett provided a telling glimpse of HMRC’s stance going forward as he laid
down a challenge to corporates and advisers demanding they allow HMRC staff
access to their most confidential systems.
He said he would be writing to the major corporates and tax advisers in the
next few weeks asking them to commit to a charter to allow broader secondments
of staff and grant them access to more information.
“It’s just not enough to say you crave certainty in tax administration
without investing in the people charged to deliver it: Take HMRC people on
secondment,” Hartnett said.
“I’m afraid I cringe when a firm or company says ‘we’ll take on your people,
but you can’t see our systems’. It’s just not enough.”
Hartnett repeated his warning that the second tax amnesty was the last
opportunity high earners would have to come clean. “We’re offering one more
chance to sleep easy at night by disclosing income held in offshore locations.”
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