Gamekeeper-turned-poachers undermine HMRC

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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?

Wendy Bradley
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By redboam
05th Feb 2016 18:37

Unremarkable....

....and not very original. We all know tax inspectors have been crossing to the other side for decades. Perhaps they should have posted a question on here instead.

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08th Feb 2016 08:48

Absolutely

yet another piece of research confirming something which is common knowledge - and presumably they get paid for it too.

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By iainx6
05th Feb 2016 20:12

Gamekeepers
It is a somewhat remarkable extension of the meaning of avoidance for it to now apply to this "glut" of senior tax inspectors, who are now apparently busy cooking up schemes to exploit and accelerate reform.
Sure beats arguments over transfer pricing.

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06th Feb 2016 09:17

Gamekeeper turned poacher

As one ex-HMCE Officer, I would add that taxpayers pay more attention to a paid adviser, than to a Civil Servant. As a result, my Client's compliance improves more effectively than when a VAT inspector visits. HMRC do need to learn how to improve compliance with carrot-and-stick as well as a stick!

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08th Feb 2016 07:54

Good to hear
Nice to hear that there's somewhere for skilled HMRC staff to go after this government has got rid of them.

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10th Feb 2016 12:00

mates rates

we have had experience recently of a client being approached by an ex HMRC offering to get them a better deal than we can when dismantling a DOTAS scheme because he can get his mate in the tax avoidance section to give a preferential rate of settlement.

 

When we did the usual "put up or shut up" argument, the ex HMRC came back with a "settlement opportunity" it was nothing more than give in, settle up and we will only charge you interest. 

 

We explained to our client at the outset that the days of "special deals" were long gone - only to have the client fire across at us the recent Google deal. Doesn't help when HMRC or the government have competing agendas...

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10th Feb 2016 12:02

Only one problem

So who is going to be employing Lin Homer? or does she fail the skills test?!

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By Echo761
14th Jul 2016 11:06

As a previous VAT officer (Inspector if you want to use the equivalent in IR terminology) I find it incredible that we are still seeing the clear division of roles and historic use of IR terminology. When HMRC was formed and C&E were subsumed by the much higher graded (I would argue, unjustifiably) IR this was the first issue that should have been addressed. In the commercial world ex IR inspectors are not seen as any more important than VAT inspectors who command similar salaries - unlike in HMRC. There has never been any attempt to address this clear division in HMRC and this is part of the reason you now have so little experienced VAT staff to deal with the correspondence received and compliance visits - all of the good ones have either left or retired. Yes compliance visits - one thing which IR inspectors have never quite got their head round is the value of actually carrying out face to face on site visits which are vital in conducting VAT reviews. Sitting in your office trawling through piles of paperwork will be the death of VAT compliance reviews and contribute to the shortfall in the amount of VAT paid by businesses. Stop thinking that "IR Inspectors" is terminology that should still be used. You are all "officers" of HMRC. Like it or lump it - or join the queue of staff trying to get out.

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