HM REVENUE & CUSTOMS chief executive Lin Homer has dismissed suggestions by the Public Accounts Committee that Deloitte was used as the “preferred facilitator” in tax disputes with large private businesses during Dave Hartnett’s spell as tax secretary at the department.
The committee raised the question at the end of a hearing about tobacco smuggling in light of Hartnett’s recent move to Deloitte, where he works one day per week advising developing nations on their tax regimes.
Hartnett’s time at HMRC has seen him heavily criticised over so-called ‘sweetheart’ deals struck with multinationals, including investment bank Goldman Sachs. In 2010 he agreed to waive interest penalties of up to £20m on offshore bonuses paid to bank staff in order to settle a lengthy tax dispute.
Last month, the High Court dismissed a legal challenge to the deal brought by anti-austerity activists UK Uncut, ruling that the settlement was “reasonable” and lawful.
During the hearing this week, the committee suggested Deloitte helped broker the accord. Homer (pictured) rejected the suggestion.
“Not to my knowledge, and I don’t see any evidence to suggest they were playing a preferred or significant role in our large disputes,” she said.
Richard Bacon MP went further, querying whether HMRC had ever acted as a “marriage broker”, introducing an adviser to a company, drawing a terse response from Homer.
She said: “You have made that assertion. I’ve no evidence to support that and I’m not prepared to have it said.”
Responding to the allegations, Deloitte said in a statement: “We haven’t acted for HMRC in relation to any tax settlement negotiations. Furthermore, Deloitte has never been brought in or introduced in any way to any dispute or settlement opportunity by HMRC.
“HMRC published a litigation settlement strategy which set out the parameters on when it should litigate and when it was appropriate to seek a settlement. All settlements on which Deloitte advised were conducted in accordance with HMRC’s strategy. Other business advisory and law firms advised on similar settlements.”
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
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