Jun 01 2012

UK tax chief’s been spreading his soft touch message worldwide

Posted by: Nick Shaxson in: Thoughts

Vanessa Houlder of the FT, who writes a lot of interesting stuff but in my personal view is rather too close to big business on occasion, has written a very useful article today about Dave Hartnett, the UK’s top taxman. Now last August I called on Hartnett to resign for the appalling things he’s done, some catalogued in Treasure Islands, and others such as UK Uncut have too. It seems that he’s now been pushed (not on my account, I’m sure.)

From the FT article, entitled Did light touch tax become soft touch?, a paragraph which summarises the damage

Mr Hartnett’s role in encouraging “far too cosy a relationship between HMRC and large companies” was cited in a scathing report by Parliament in December.
. . .
The ramifications of this row stretch beyond Britain. At the root of the allegations swirling around Mr Hartnett’s dealings with business lies his deliberate decision to seek a closer, less combative relationship between big companies and tax authorities. This calculated effort to put transparency and trust at the heart of tax administration – officially known as the “enhanced relationship” – has spread across much the world since 2008. Mr Hartnett played a pivotal role in its promotion, according to Jeffrey Owens, until recently the top tax official at the Organisation for Economic Co-operation and Development. “Dave was very much at the forefront of pushing the concept”.

To quote from the end of my last blog:

Apparently, Hartnett used to take a pugnacious approach to taxing businesses, but that changed; the pivotal moment, Houlder suggests, was a review in 2001 led by the UK’s then Labour Chancellor Gordon Brown, whom I excoriate in Treasure Islands.

So although I have my beefs with this FT journalists on other occasions, I think that this is a fantastically useful article, following in a noble tradition set by others such as Chris Giles with his demolition job on Bank of England governor Mervyn King, whose imperious behaviour Hartnett seems to share:

For insiders, the question is quite different. They do not doubt Mr Hartnett’s integrity or dedication. Their puzzle is why this brilliant, if idiosyncratic, veteran allowed himself to dominate the department with few checks and balances, leaving him ill-prepared for public scrutiny of his dealings with big companies. . . . He stunned MPs in October with his blunt assertion that he was the only Commissioner with “deep tax knowledge”, laying bare the department’s limited ability to conduct reviews of controversial tax cases at the highest level.

Sounds familiar.

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