Is there a Liberal Democrat stance on HM Revenue & Customs?

The news that the Public Accounts Committee of the House of Commons has condemned the way in which HM Revenue & Customs staff have handled their dealings with the United Kingdom’s largest corporate taxpayers is merely the latest of a series of PR disasters for a Government department that now raises nearly £500 billion for the public purse annually.

Accusations that Vodafone was allowed to avoid more than £1 billion in tax, and that Goldman Sachs was erroneously allowed to pay an enquiry settlement without interest amounting to £10 million, are alleged to be just the tip of the iceberg, with the Public Accounts Committee suggesting that as much as £25 billion is in dispute between large companies and HMRC.

Meanwhile, the PAYE system, which deals with more than twenty-five million taxpayers, is reported to have collapsed under the strain, with hundreds of millions of pounds of income tax written off through failure to carry out timely reconciliations, and significant delays in making repayments to taxpayers.

And with levels of engagement (read morale) amongst HMRC staff the lowest in the Civil Service and the Public and Commercial Services Union, which represents the majority of them, more militant than ever, there are real doubts about the Department’s leadership.

Chief Executive, Dame Lesley Strathie, was recently forced to retire through ill-health, and with the Permanent Secretary, Dave Hartnett announcing his hitherto unexpected retirement next summer, the incoming Chief Executive, Lin Homer, has quite a challenge on her plate.

So, if you were in her shoes, what would you do?

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  • Has anyone got any links to some actual reports? As an accountant, I’d like to read more than headlines from the Guardian and Daily Mail announcing how this is the end of the world, and understand whether this is a case of undue exceptions or correct application of tax law.

  • Old Codger Chris 20th Dec '11 - 10:07pm

    I’ve heard it said that an IT system that doesn’t work and constant mind-changing by the Labour government (don’t know if it’s got better or worse under the coalition) are major factors. If this is so, it’s a depressingly familiar story.

    If I were the new Chief Exec I’d be saying let me get on with the job and I promise to treat all taxpayers equally under the law.

  • Simon Bamonte 20th Dec '11 - 10:47pm

    I watched in utter disbelief reports as both the BBC and C4 news tonight revealed the way HMRC treats big clients like mega-corporations and banks. It is obvious to anyone that they most certainly do not treat small & medium businesses the same as they treat the big guys. How many small business owners get posh meals (probably paid for by taxpayers, no doubt) and the chance to discuss favourable tax arrangements with high-ranking civil servants? No, small business owners get the underpaid, overworked person in a call centre and a visit from the bailiffs if they don’t pay every penny of their owed tax. Letting huge, already unimaginably profitable companies like Vodafone get away with not paying billions of pounds in tax in a time of national crisis such as now is morally inexcusable and is more proof, if it were needed, that there is not even an illusion of a level playing field when it comes to tax.

    Protest groups like UKUncut have been proven correct. They may have often been hyperbolic but they were damn right to highlight this scandal which, if we don’t do something to fix, will be another issue the public will not forgive us for.

  • Surely our stance is “simplification”. One thing I’ve heard suggested is that the tax code is so complex that for the ultra-massive corporations there is simply no “correct” figure which can be calculated for how much tax they owe.

  • Richard Swales 21st Dec '11 - 11:14am

    I agree with Hywel. The Slovak equivalent of Tolley’s is about the size of an Argos catalogue, and it is possible to sit and read through it and know everything you need to know to run a business.

    When I do a “zero-rated cross border services invoice” (e.g. translating in Slovakia for a VAT registered client in the UK then emailing the result over to them – these are special because the client declares the VAT himself and pays it direct to HMRC, not through the supplier as with single-country services invoices) the Slovak text on it says something like “see paragraph X of the VAT law”. The English text says something like “see HMRC leaflet 1234” – because British tax law is so complex and user-unfriendly that you can’t expect people to find their way around it. This is not just a problem in tax, generally in the UK laws (including relevant judgements) are so complex and not all in one place so we simply have to rely on the government (or lawyers) to tell us what the laws actually are instead of reading them directly.

  • Richard Swales 21st Dec '11 - 1:09pm

    Sorry, to add to what I wrote – the point is that clear, objectively defined laws, which non-specialists can read, understand and comply with are the the basis of a fair justice system.

  • There’s a good, relevant article about tax avoidance by Stephen Williams MP at

  • Just imagine 25th Dec '11 - 12:11am

    Any chance we could just abolish it?

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