HMRC permanent secretary for tax Dave Hartnett has rejected claims that HMRC is too cosy with big business and has said that people who pay cash in hand to tradesmen are “diddling” the economy.
Hartnett, who is to retire in June, had a bruising 2011. He had to explain the PAYE coding fiasco, which had MPs and newspapers frothing at the mouth about the number of taxpayers who were facing repayments after a two-year backlog built up, and faced growing criticism of HMRC’s controversial tax settlements with Vodafone and Goldman Sachs.
Writing in the Tax Journal in response to criticism by CIOT president Anthony Thomas that HMRC is “too collaborative” when collecting taxes from larger businesses and unsympathetic to smaller businesses and individual taxpayers, Hartnett said HMRC is careful to treat its customers even-handedly.
“At the heart of HMRC’s compliance work lines the goal of voluntary compliance – where taxpayers freely meet their obligations, cheaply and easily, and without the need for intervention from us,” Hartnett wrote in January. “In strategic terms, this means that we will support those who are honest and open with us as well as those who need help, while relentlessly pursuing the cheats – irrespective of their size.”
Settling tax disputes outside court is a pragmatic use of resources, based on clear principles, Hartnett added.
In January, Hartnett warned that people who pay cash in hand to tradesmen are “diddling” the economy and diverting money from hospitals and schools.
“Tax provides the funding to run the country: hospitals, schools and everything else,” Hartnett told the Telegraph. “Every time someone pays cash in order not to pay VAT, the nation gets diddled.”