Jolyon Maugham has a rightfully indignant blog out this morning on the fact that HMRC has not been prosecuting cases of overseas tax evasion.
But most particularly he is angry that HMRC has deliberately led people like Jolyon and me to think there had been rather more than the actual 11 cases they have brought over the last five years on this issue. This is from Jolyon's blog:
Here's an extract from HMRC's 2014 annual report on tackling offshore evasion: ‘No Safe Havens.' And at page 11 it contains this table:
revealing 2,962 actual and prospective charging decisions.
Did only 11 of those lead to convictions? No. We can now conclude that by including that table — which includes charging decisions for such matters as wrongfully claiming tax credits — HMRC set out to mislead you as to its success in tackling offshore tax evasion. Not lying — because the document does not explicitly state that those are charging decisions in relation to offshore evasion — but an attempt to mislead.
That's a serious charge — so don't take my word for it. Have a look at that table and the context in which it appears. Look at the document and at the page. It appears in a document about offshore tax evasion. As the screen-grab above shows, it appears at the end of a paragraph talking about offshore tax evasion. Nowhere I can see in that document is it made clear that that table has nothing to do with offshore evasion. Indeed, the document very strongly suggests the table is about offshore tax evasion.
I have to say that I simply think Jolyon is being too kind to HMRC or alternatively is insufficiently sceptical.
The Public Accounts Committee have today accused HMRC of failing in their duties, and rightly so.
HMRC must have been aware of the risk that they would be accused of this. In that case I do not think their annual report was accidentally misleading. I think they meant to mislead. Or deceive. Or make a false representation.
Sure that's strong language, but I am bored by having a tax authority that from the very top goes out of its way to hide the truth in the way no taxpayer should and which should be utterly unacceptable on their part.
The HMRC Board is riddled with a culture that deliberately apes that of big business. I have always argued that is unacceptable. Now that is becoming increasingly apparent. The whole rotten management of this failing body needs to be replaced and proper governance , including an Office for Tax responsibility tasked with holding it to account on Parliament's behalf is needed. And the sooner the better. I want the days when my tax authority can't or won't tell the truth to be very firmly numbered.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
It would be helpful if HMRC pursued overseas tax evaders with the same obvious enthusiasm and assiduousness as they have pursued me for £84 that I now don’t owe, they tell me after two years, sheriffs, bailiffs and all sorts.
No excuse for that – who at HMRC thought that this wouldn’t be uncovered? Crazy that someone thought this wouldn’t come back to bite them.
If some individual received tax credits as a result of similar statements to this HMRC table they would be not only accused of the f (for fraud) word they would be prosecuted for it.
They certainly would not be described as making a “misleading” statement.
One rule/law for the little man/woman, a totally different set of rules and laws for the well heeled.
As someone who spends most of my working life writing material for publication (albeit mostly postgraduate course material for the OU), which is submitted throughout that process to critical review and checking, I have to say that if I saw a table like this placed as it is here I’d automatically assume it was done to mislead, Richard. It’s so obviously placed in a position relative to the text and the subject of the text, that no other conclusion is valid – unless the person who put the report together is an absolute novice at such an exercise. And given what I’ve seen of many HMRC reports over the years, I don’t believe that to be the case. As an organisation they have become way to sophisticated at PR to allow a novice anywhere near a report such as this.
No, as you say, this is another example of the culture created by the corporate capture of HMRC filtering through into how it goes about significant aspects of its work. But nobody can honestly be surprised at that, surely. For five years we had a government whose strategy was to present itself as tough on tax avoidance and evasion, while actually creating a system that was even more “sympathetic” to such practices. And now, shorn of any worries they may have had previously about upsetting coalition partners, we have a Tory government that in everything they do promote the protection and advancement of the interests of big business and the wealthy, by almost any means. Nowhere has that been more evident in the past two weeks than the procession of despots and erstwhile dictators that the government has rolled out the red carpet to in the name of promoting “trade”.
Never forget, the modern Tory has no time for morality or ethics when there’s money to be made.
I am certain this was deliberate
I would not be surprised in the slightest if they were intentionally misleading. (too strong to say lying?)
The way the HMRC has treated certain corporations with kid gloves and giving them sweetheart deals has been appalling.
Just seems to be one more example of the state being captured by the money men.
“The HMRC Board is riddled with a culture that deliberately apes that of big business”
An interesting choice of word: ‘apes’, and a better explanation than mere ‘culture’ – a criticism which, in plainer language, is bananas.
A closer look at the senior echelons of HMRC reveals the organ-grinders of international tax evasion, on secondment from the Big Four accountants; and the organ-grinders’ monkeys, rattling the tin for pennies and competing for a lucrative directorship with the Big Four, to help in their retirement.
Which is to say: I hope whoever signed off on that report was promised – or rewarded with – a particularly fine banana.
The simple fact is that HMRC’s policy is to not prosecute where a tax payer ‘comes clean’. Instead civil penalties are administered.
It was called the ‘Hansard’ procedure and now has been codified as part of the COP 9 investigations procedure.
Why is this HMRC policy? Because it was and is the policy of successive governments and has been since the first official mention of it in parliament in 1923, since when it has been confirmed over the years by numerous ministers from all parts of the political spectrum.
Some MPs blaming HMRC for doing what other MPs have told HMRC to do is a bit rich.
The policy has its uses
But it is not always used as you well know
There are prosecutions but they have a decided class focus to them: no other description is possible
I suspect they would argue that the provision is applied consistently regardless of class.
But it does strike me that someone with significant resources and the support of well paid advisers who are fully aware of this procedure and thereby able to argue their case better (and stop any bullying by HMRC etc.) will find it easier to ‘come clean’ that some poor bugger who is scared #~@’less, doesn’t know his/her rights and has no well paid advisers in tow.
It was once the case that the policy of successive Governments was in support and codifying all sorts of things, from slavery and child labour to the death penalty and imprisonment for homosexuality.
I understand that the fact that none of these once codified policies are no longer codified policies is down to something known as progress. A concept which should not exclude tax policy.
For the purposes of balance it is worth noting that there appears to be some groups and individuals in our society who would not consider any of the above (and a whole lot more) as progress.