David Gauke said on Tuesday:
Now agreeing the ‘right amount of tax at the right time’ is a key aspect of HMRC’s work. We all want to minimise the scope for disputes wherever possible. But realistically, there will always be questions over what is the ‘right amount of tax’.
These disputes can be very expensive — lasting several years and generating eye-watering legal fees. As well as being unproductive, these costs fall on both sides of the table. This means that we have a double interest in reducing them. Not just to cut HMRC’s costs, but to reduce the costs incurred by the taxpayer, as well as the costs to business.
So while, as a Minister, I don’t know the details of individual cases, I was pleased to see HMRC recently achieve the largest cash settlement in the department’s history.
This has bought in extra revenue that has sat in financial purgatory for numerous years, and shows the department and business working to resolve long-outstanding issues.
That’s why — rather than join a bandwagon with those who would question HMRC’s direction of travel in this area — I want to see HMRC build on the way it manages relationships with large businesses.
That’s all right then. Writing off about £4.8 billion of tax due is just hunky dory - and if anyone else of similar size want to come along and ask for a bi discount deal Gauke’s only too happy to settle.
I wonder what rate he’ll give me now on my January tax bill? Not one penny I suspect.
What did Leona Helmsley say? Was it:
"We don't pay taxes. Only the little people pay taxes...,"
No‚Ķthat was David Gauke I now realsie. And I sincerely hope he’s held to account for it sometime soon, just as she was:
Photo credit: Wikipedia.
The charge against Gauke. Try treason - the crime that covers some of the more serious acts of betrayal of one's sovereign or nation.
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I too have concerns from a political perspective about deals done with some that are not done with others – the law should be applied and applied properly and without favour to someone or some company simply because it is considered to be too powerful …
But to correct your illusions for a moment … Mr Gaulke did not settle, HMRC did. They did so on advice and with the benefit of disclosure that you and I will not see (and cannot expect to see). HMRC do employ effective lawyers and others to represent them – so equality of arms is not, in reality an issue.
As to the claim of ‘treason’ – don’t be so silly!
@Evan Price
Silly?
Far from it
No one can explain why this deal was done
And a lot of people are very angry it was
And don’t believe for a minute HMRC settled without permission – don’t be silly
A settlement of litigation is done by reference to the documents and claims being made by the parties and between them. Disclosure of documents will normally have taken place prior to the deal being done, so all parties and their advisors will know what the prospects are and risks are in relation to the dispute between them.
That you are disatisfied because you are not a party to the reasons or reasoning behind the deal that is done is, to be frank, tough. A taxpayer is entitled to confidentiality – unless that confidentiality is broken by some lawful means. Of course, some information will appear in the accounts of the company in due course … and no doubt you will make of it what you will.
As to the claim that £4,8 billion has been lost – how do you come by your figures? The reality is that you cannot possibly know – as you don’t have the paperwork.
Of course consent of ministers will have been obtained for a deal of this magnitude, but the minister would be foolish to proceed with litigation if the advice they are receiving from HMRC and its advisors is that this deal is one that is sensible to do …
@Evan Price
I refer you to Private Eye
@Richard Murphy
Critical reading for all tax professionals.
Now is it possible that the Private Eye article could have been written by Richard Brookes, now a Guardian journalist (on the Tax Gap) and also an ex-(possibly disgruntled) tax inspector?
As much as like PE, I see no evidence at all for their assertions.
@Justin
I suspect he knows he’s absolutely right….
I don’t think Private Eye would do in court as evidence … 😉
The reality of the situation is that HMRC (and before it the Inland Revenue) have been undertaking settlements with taxpayers since the dawn of time to both sides’ advantage – cash for HMG and closing a tax issue for the taxpayer. Most of these settlements arise because their is a genuine disagreement over how the law works – not through blatant avoidance. The blatant avoidance cases have always been litigated because of the principle at stake on that particular issue. It will happen again and commenting on this specific matter (Vodafone) is inappropriate as none of us have any of the details or the context. HMRC cannot divulge this due to confidentiality and the taxpayer is under no obligation to disclose commercial details.
If PE got their “data/information” from a source at HMRC then the leaker should be found and disciplined for revealing confidential taxpayer data. If HMRC felt that they had a strong position then they would have litigated.
I can think where I picked up the following phrase but “just deal with it”.
Interesting that Private Eye is now the most reliable source of taxation decisions in the land. I suppose we can get rid of HMRC and all those expensive accountants, and ask PE when we don’t know exactly how much tax we should be paying.
I’m confused, Richard. A couple of weeks I brought to your attention an apology The Independent made to Vodafone about the company refusing to pay £6 billion, a figure which HMRC has described as an ‘urban myth’. You criticised me then because you said the issue was not the amount, but the fact that Vodafone had been let off. Now you seem to be using the £6 billion to make your argument. I thought it wasn’t about the amount.
‘ago’ is missing from the first line after ‘weeks’. Apologies.
@Ralph
They didn’t refuse to pay £6 bn.
The apology was right: HMRC wrote it off their own internal estimates of liability (I presume based on PE stories) in coming to an agreed liability which Vodafone is paying
I note Private Eye repeats the story this week: I presume they are very confident about the data in their possession. It is that confidence to which I refer
Of course HMRC say this is an urban myth
They said the same of the tax gap and now it’s their #1 priority
I accept the figure is an estimate – all such things are – but I also think that in the absence of evidence PE are wrong – which I am sure will never be forthcoming – then PE are likely to be closer to the truth
That’s what I’m saying because that is the way of these things
And let’s reiterate: Vodafone have done nothing wrong. HMRC are being blamed
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Do I understand this right? You are accusing HMRC of settling for a lesser amount of tax than they think is due, on their reading of the law and the facts of the case. And that they gained permission to do so from the government. So cui bono? Why should HMRC decide to give Vodafone a billion pound tax bonus, when they could have gone to court and got the lot? Why should they recommend to the government that such a deal be done? Or are you suggesting the government sent done orders from on high that HMRC should settle, despite them having a watertight case? Why should they do that? There’s no candle for them in that – less tax revenue when they need all they can get and loads of bad publicity.
Unless you are suggesting graft and corruption, I cannot see why any of the players in this case would agree to the deal unless there were a genuine difference of opinion as to what tax was due, and neither party wanted to take it to court.