Dave Hartnett made himself one of the most unpopular men in the UK when he headed H M Revenue & Customs.
Now he's working for HSBC. And it's clear he's singing his new bosses tune. As many will know, the European Union is proposing something quite close to full country-by-country reporting for banks. So who should pop up and oppose it but Dave Hartnett, who is quoted in the Tax Journal saying:
Dave Hartnett, former permanent secretary for tax at HMRC, has warned that country-by-country reporting could result in ‘crude comparison' of a multinational's tax bills in different countries.
In an interview with Tax Journal, published last week, Hartnett said: ‘There is a strong case for more transparency in relation to the tax paid by companies and at a time of financial austerity, citizens want to be able to see for themselves what tax corporations are paying and judge whether it is fair.
‘But I have misgivings about country by country reporting if the aim of those seeking it is to compare tax paid in one country by a multi-national with what it pays in another. Such crude comparison is of very little value unless the reader has a good understanding of the different tax incentives available in each country and other features of each tax system.'
So there we have it; Hartnett's in favour of tax transparency, but not if it's useful.
And he's willing to patronise, I note (ever an ability he possessed, in my experience, at HMRC). Perhaps he'd also like to explain why he assumes the user of accounts aren'table to appraise local incentives? Are we not as clever as him?
A few choice words come to mind. I'll refrain from using them, but reluctantly.
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Joe Average doesn’t accept or realise that tax should be payable on profits rather than turnover, or that allowances are given for past losses, but it doesn’t stop accounts being made public to people who wish to do crude calculations of the tax they think should have been due.
Parliament requires accounts to be published because liability is limited, not to provide tax transparency. Why does country by country reporting need to be a matter of public record?
Can’t country by country reporting be achieved by tax authorities using all those TIEA’s that are out there? Is it time for the authorities to do a cookie cutter TIEA letter?
Read the briefings I’ve written on CBC and stop asking absurd questions
With respect Michael, you are also taking a rather patronizing attitude in assuming people don’t know that tax is paid on profits instead of turnover. Do you really think most people expect companies that have made a loss to pay Corporation Tax?
What people are angry about is wealthy companies who can make a lot of money by being in the UK paying little or no tax by shifting profits made in the UK to a low or no tax juridiction which doesn’t have the physical or societal infrastructure that enabled these companies to operate profitably in the first place, and that taxes pay for.
If CBC stops these companies getting something for nothing then it’s worth doing.
Every word is superfluous … simply speechless.
You’re right, Hartnett is incredibly patronising thinking that nobody else can read accounts properly. I’ve never had any formal training in accountancy and it all seems rather straightforward to me.