Jolyon Maugham has posted an important blog this morning. It features a recording made by an old friend of this blog, Richard Allen, who is a massively important and effective tax campaigner, mainly on VAT.
In the blog Jo features a recording Richard covertly made of a conversation with HMRC in late 2015. Jo publishes it using a public interest defence, which I support. The conversation is with a person who called Guy Westhead. As Jo notes:
Guy Westhead [was]a senior member of HMRC’s team dealing with VAT policy, and a Mr Richard Allen that took place in late 2015.
At the time of the conversation, Guy Westhead was a senior HMRC officer. During the conversation he described himself as being one level below the Director of Indirect Tax at HMRC. Below is a photo, taken several months after the covertly recorded conversation, of him sitting behind the then Financial Secretary to the Treasury, David Gauke. Mr Gauke was, at the time, appearing in a debate before the Backbench Business Committee on VAT Evasion and Internet Retailers.
In that conversation a key moment comes in this exchange:
RA: What worries me is that ministers have some kind of agenda to basically not annoy Amazon. If Amazon does something illegal Amazon has to be punished in my view. In America they tried things like “that’s it we are not building a warehouse in your State” and all this sort of stuff…
GW: I’ve heard of that. I’ve heard from the Treasury; the Treasury didn’t want us to be too hard on Amazon. But I think that was a brackets “yet” close brackets.
Just think about that for a moment. What the HMRC official is saying is explosive.
First, the Treasury appears to be directing HMRC in the management of a taxpayer's affairs. That is not meant to happen.
Second, the implication is that they were turning an explicit blind eye to fraud that they knew was going on. Were they facilitating the tax gap, for which real people paid through austerity measures that have forced millions into poverty in this country?
Third, the tax evasion in question was criminal: were they were knowingly letting it continue?
Fourth, in the process were they were knowingly undermining small UK business?
Fifth, were they were ensuring HMRC failed in its statutory duties?
Sixth, were there lies to parliament?
Seventh, was legislation promoted that knowingly favoured online retail portals and was knowingly ineffective?
These are not minor suggestions. They suggest corruption at the core of government, and issues do not come much bigger than that in tax.
Questions do need to be asked now: I sincerely hope MPs are up to the task of doing so.