THE UK’S MOST SENIOR AUDITOR has been accused of “undermining” a judge-led review of apparent ‘sweetheart’ deals between multinational corporations and the taxman.
Amyas Morse, head of the National Audit Office, said an enquiry led by Sir Andrew Park into multi-million-pound deals between five parties and the taxman after long-running tax disputes would find “nothing of substance”.
Morse’s comments were made in a previously unseen e-mail sent by the then-chief executive of HM Revenue & Customs, Dave Hartnett, and also suggested Morse told staff at the NAO the investigation would find no evidence of wrongdoing, the Guardian reports.
The NAO report ruled in June last year that the taxman had struck ‘reasonable’ deals in all five cases in question and that the overall outcome for the public purse was good, with at least one case described as “better than good”. It based its findings on how much HMRC could have expected to win if it had engaged in litigation in each case.
Despite finding largely in HMRC’s favour, the NAO’s report expressed dismay over how the settlements were reached, noting “specialist staff were sometimes excluded from the final settlement negotiations” and HMRC “did not always ensure that staff involved understood the reasons for settlement”.
The e-mail, marked “private and confidential – please do not pass on to anyone without coming back to me”, was sent by Hartnett on 15 December 2011 to ten senior HMRC officials. It outlined a “useful and interesting” meeting which had taken place that afternoon. “Amyas has been insistent that Andrew Park tackles the cases one at a time”, it read. “He [Morse] has told me that he has made clear to the NAO that his expectation is that nothing of substance will be found in the review.”
Campaigners including UK Uncut allege a secret, cosy relationship existed between Hartnett and multinational companies including investment bank Goldman Sachs and telecoms giant Vodafone, leading them to strike tax deals which left the public purse out of pocket. Following the emergence of the e-mail, they have raised concerns over a similar relationship between Morse and Hartnett and the reliability of Sir Andrew’s findings.
UK Uncut spokesperson Anna Walker said: “[The e-mail] implies that the NAO was reassuring HMRC that their decision to let Goldman Sachs off many millions pounds of tax owed would be given the OK before the conclusions of Sir Andrew Park had been received. In fact, it suggests that the NAO decided that HMRC had not done anything wrong before its investigation had even begun.
“This reinforces the need for the full report, including details of the companies involved and the size of the settlements agreed between HMRC and the corporations, to be published without further delay.”
The NAO’s press office declined to comment.
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government
Kevin Reed discusses the worrying findings from HMRC on micro-businesses' problems handling Real-Time Information, and the latest thoughts on how accountants can provide value-added services