Reuters reported this morning on yesterday's National Audit Office report on Dave Hartnett's settlement regime at HMRC. As they, kindly, summarise it:
While the NAO said the settlements were reasonable, insofar as HMRC may have received less if it litigated and lost, the watchdog found procedural errors in how the tax collector cut the deals.
HMRC did not always seek legal advice before agreeing settlements, refer settlements for independent review, as was standard procedure, while staff did not keep notes of all meetings at which settlement terms were agreed.
"The findings from the review of these five settlements confirm our concerns over the governance arrangements operated in these cases," the NAO said.
Let's unpack that: what they're saying is that Hartnett was out of control, follwoed no set procedures, ignored the law, failed to record waht he was doing and therefore cannot evidence why the tax settled was paid, and why sums that might have been collected were ignored.
Now no one says corruption occurred, me included. But the possibility existed. That is wholly unacceptable.
And the rule of law was not upheld. That was also wholly unacceptable.
And the risk that favours were seen to be done was very real. And that too is wholly unacceptable.
Tony Blair may have run a government from a sofa. But it is absolutely wrong that our tax authority was run that way.
It's a good job Hartnett is retiring: he'd be resigning now if not. And that would have been the right outcome for this fiasco.
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Britain’s disintegrating and it’s being plundered by the authorities while that’s happening. Not just this, as you say witness what’s going on with the Work Progamme too. More on that here http://mylegal.proboards.com/index.cgi?action=display&board=frontline&thread=683&page=1
The crux of the report was that the settlements were reasonable but internal procedures were not always fully followed.
So how exactly was the “law” and Rule of Law not followed?
We” find out in the UK Uncut case – which is aimed at exactly that – and which the judge thought possible
Absolutely, Richard. For once, an NAO cover up will be subject to public scrutiny in a court of law. The judicial review will no doubt spill a can of worms.
Some facts to bear in mind:
1. The conclusion that the settlements were reasonable is the opinion of ex-PWC boss and now Comptroller and Auditor General of the NAO, Amyas Morse.
2. Morse’s conclusion is in turn based on a legal advice by his appointed adviser Sir Andrew Park, and while Morse has the power to publish the report he has chosen not to share it with either the public or our elected representatives in the Public Accounts Committee.
3. Morse had already waived these settlements through in his report of July last year, so he has a vested interest in this latest conclusion on reasonableness.
4. Morse and Park delayed the publication of his report (originally scheduled for the autumn) to enable HMRC to argue in the High Court yesterday that a judicial review was unnecessary because the as yet unpublished NAO report will deal with all the issue. Very cynical and a blatant display of connivance between a regulator (NAO) and the regulated (HMRC).
So anyone remotely familiar with NAO’s report — eg the plethora of cover ups relating to the Ministry of Defence scandals and the PFI scandals will not be surprised at the asymmetry between his findings of fact on the settlements (such as no legal advice obtained, procedures breached, no note of settlement decisions etc) and his conclusion that the settlements are reasonable. No wonder he won’t prove this by publishing the full report by Andrew Park.
Unfortunately for him and Park the UK Uncut judicial review will shine a most uncomfortable light on this cover up as regards the Vodafone settlement. I hear that there might be a judicial review of the Vodafone settlement as well, so this is definitely not over.
Hopefully when all is said and done next time Morse expresses an opinion on reasonableness, right-thinking members of the public will rightly take it with a pinch of salt.
I meant to say that Morse and Park delayed the publication of his report originally scheduled for the spring – not autumn. Of course the Uk Uncut JR relates to Goldman Sachs.
Slightly off topic but I was encouraged to read that the Lichtenstein Disclosure deal is due to recoup up to £3Bn, about triple what was expected. Although this figure could have been much more had the full tax and penalties been applied, the money will still be useful to the UK economy.
But no prosecutions – and massive amounts of evasion forgiven
Is that a win?
It is certainly not the ideal case and in an ideal world everyone would be prosecuted and forced to pay the full tax plus the penalties. But as you have pointed out on many occasions we don’t live in an ideal world and I would imagine that many of these tax cases could take years to be settled, with massive cost to the taxpayer – although I can appreciate that the argument could be made that this amnesty is already costing the taxpayers huge sums. The case of HMRC v. Robert Gaines Cooper is a good example of how long these things can drag on and there is no guarantee of victory.