Tailby: HMRC needs external help to fight tax avoidance

THE FORMER DIRECTOR of anti-avoidance at HMRC has urged further investment at the department to fight tax dodgers – including hiring more external expertise.

Chris Tailby, who served as director of HMRC’s anti-avoidance group between 2004 and 2009, told Accountancy Age that Big Four and industry tax specialists should be recruited to help fight tax avoidance.

“They were worth every penny in that they had the commercial knowledge and experience to identify transactions which were purely for tax, and those which were done for commercial reasons,” said Tailby.

He was dismissive of the Public Accounts Committee’s concerns – voiced a week ago – that HMRC works too closely with tax professionals and other parties when consulting on tax rules.

“We don’t want law that creates unintended consequences,” said Tailby. “You will always have advisers on the spivvy end of the market, so it’s best to get the tax law right – you need input from a lot of people.”

Some pre-consultation discussions with “trusted” advisers had been helpful to him while at HMRC – sounding out whether anti-avoidance plans had the potential to work.

“I had some trusted external guys who I could ask ‘if I did this…’ – sometimes they would say ‘great’, or sometimes ‘no’.

The committee had questioned Big Four tax heads as part of their investigation into tax avoidance, with chair Margaret Hodge claiming that they were too close to government in influencing the formation of tax law – a claim vigorously denied by the witnesses.

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