Wendy Bradley investigates research by Warwick Business School and the University of Birmingham, which claims former HMRC workers are helping companies find tax loopholes.
The research, in Accounting, Auditing & Accountability Journal’s Autumn 2015 issue, is based on interviews with current and former senior HMRC staff and “documentary data relating to reform from 2003 to 2012”. The authors find that tax professionals who are moved into what they call “hybrid management roles” adopt different responses: basically some resist moving away from a technical tax role into management and customer facing roles, and some embrace the change. So far so good: but they go on to suggest that there is a third way, where senior tax inspectors leave HMRC and join major companies where they become “canny customers”.
Many of us would say “so what” at this point: there has always been a flow of trained inspectors out of the Inland Revenue and HMRC and into the profession and business. The authors seem to be suggesting, however, that there is something distinctive about senior civil servants leaving HMRC in the 21st century for roles in multinational corporations. That they are somehow making use of their knowledge of the customer service focus of HMRC’s large business offering to do... what? “Exploit and accelerate reform”? You have to wonder how that would work, exactly.
As you might imagine, the inspectors themselves aren’t happy with the suggestion. ARC, the union for senior members of HMRC “regrets the recent article on HMRC professionals and their role in Large Business. We would have liked to have been consulted as part of the research exercise to make the point that HMRC staff are professionals and carry out a difficult job, bringing in Billions of yield. We do not recognise the assertion that there is a glut of former HMRC staff helping companies to find tax loopholes”
I am someone who lived through the merger of the old Inland Revenue with Customs and Excise in 2005 and I would have said that the biggest change to the tax inspector role over the period covered by the research was that we suddenly found ourselves in a department where many of our peers were specialists in fields other than direct taxes. The authors of the research seem not to have noticed, or at least not to have mentioned, that there was this rather large elephant in the room. A better explanation of why Senior Civil Servants in HMRC are different from SCS tax inspectors of yore might simply be that they are now SCS from all kinds of specialisms; the “22 professions in HMRC of which tax is just one”.
There is of course some truth in the idea that HMRC staff are expected to have moved over time from being “regulators” to being “enablers”, in line with HMRC’s customer focused strategy. How this leads the authors to believe that there is a cadre of ex-customer relationship managers now lodged in multinationals and busy undermining the tax base isn’t quite clear from the paper. Indeed I couldn’t actually find that suggestion IN the paper itself, so perhaps what we actually have here is an over-enthusiastic PR team trying to find a sexy headline for an otherwise unremarkable piece of research?