The incoming chairman of the Financial Conduct Authority has admitted to an “error of judgment” after investing in a controversial tax avoidance scheme that resulted in him repaying more than £100,000 to the taxman.
Charles Randell, a former City lawyer and government adviser at the time of the financial crisis, told the Treasury select committee that he had failed to see a “warning signal” about Ingenious Film Partners 2 LLP, an investment product that promised members tax reliefs but was subsequently challenged by HM Revenue & Customs.
There's a simple question to ask here. If you have to admit to a pretty serious error of judgement on an issue of current financial concern before you take office as head of the regulator whose task is, amongst other things, to make sure that sound judgement is exercised on issues of current financial concern are you really a fit and proper person to accept the appointment offered to you?
Might I also suggest a test that might be appropriate? Wouldn't the evidence of your sound judgement in such a situation be provided by your letter declining the appointment? And isn't its absence indication that you do not possess the required qualities for the job?
Might I suggest parliament has more questions to ask?
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
It seems he failed to notice the warning signals for five years in a row!
This is so presposterous that it is almost – but not quite – beyond parody. How about a new Surgeon General having to admit that he had not forseen the consequences of amputating the wrong leg some years previously? Or the new Chief Constable admitting that his previous purchase of undocumented goods, subsequently shown to be stolen, should not obstruct his capacity to regulate the regional crime squad? Both more extreme – but what a festival W S Gilbert would have made of it. Where is he, by the way? – Britain has need of him.
I’ve not been keeping up with the progression of the Ingenious cases, but didn’t the last court decision go partially in their favour, allowing tax relief on the money put in by the investors which was actually spent on films? http://www.bailii.org/uk/cases/UKFTT/TC/2016/TC05270.html
I said I hadn’t been keeping up. I need to add this later supplemental decision, in which the tribunal decided – with “misgivings and reluctance” – that, while the partnerships were trading, their expenditure was capital and so not deductible (i.e. no tax relief).
http://www.bailii.org/uk/cases/UKFTT/TC/2017/TC05893.html
No doubt there will be a further appeal, but that puts the investors on the back foot.
Don’t believe the blandishments of your investment adviser.
Come on Andrew, these “investments” usually only make sense because of the abusive tax relief claimed. The people devising and selling these schemes are not investments advisers. They are more comparable to snake oil salesmen. The people gambling on them are greedy, frequently clueless suckers who are prepared to have a punt at the expense of their fellow taxpayers. The words “fit and proper” have obviously been distorted to suit whatever passes for principles of those who appoint the FCA head.
Surely the point in the context of heading the FCA is that Charle Randall’s intention was to avoid paying tax.