Responding to criticism from MPs, HMRC will appoint a new commissioner to oversee major tax disputes.
Prompted by the controversies over billion-pound settlements with the likes of Vodafone and Goldman Sachs that by-passed some of its existing controls on disputes, HMRC announced that a new assurance commissioner will be appointed to oversee all large settlements. The commissioner will be appointed at permanent secretary level, equivalent to soon-to-retire permanent tax secretary Dave Hartnett, whose role in large tax disputes has come under the microscope.
The new approach will review all cases worth more than £100m, an increase on the previous level of £250m for which commissioner approval was previously needed. A new governance code for tax disputes will be introduced and the assurance commissioner will undertake a review of the processes used to in all of HMRC’s settlement work.
As a final plank in the department’s push for greater transparency in this area, its audit and risk committee will play a more active role in overseeing tax settlements. There will also be a section devoted to disputes in HMRC’s annual report.
Last December the Commons Public Accounts Committee picked up on criticisms in the National Audit Office report on HMRC’s 2010-11 accounts. In three of the largest settlements the NAO examined one or both of the Commissioners signing off the settlement also participated in the negotiations.