GAAR adviser quits over Panorama probe

Kashflow logo
Share this content

Baker Tilly tax partner and former chairman of the ICAEW Tax Faculty, David Heaton, has stepped down from the General Anti-Abuse Rule (GAAR) advisory panel after being filmed telling a conference how to keep money out of the Chancellor’s “grubby mitts”.

The presentation was covertly recorded in June by the Panorama programme, which is now available on BBC iPlayer, and catches Heaton suggesting tips for reducing tax by changing National Insurance contributions (NICs) arrangements.

This included a scheme he called the ‘Bump Plan’ which involved timing bonuses to enable an increased rebate on maternity pay.

“90% of what you pay out ends up with the employee. You can't really knock that one,” he said. By deliberately timing bonuses to enable an increased rebate on maternity pay, the tax paid on the bonus would effectively fall from 41.8% to just 8.4%, he said.

AccountingWEB members have already...

Please Login or Register to read the full article

The full article is available to registered members only. To read the rest of this article you’ll need to login or register. Registration is FREE and allows you to view all content, ask questions, comment and much more.

About Robert Lovell

Business and finance journalist


    Please login or register to join the discussion.

    17th Sep 2013 09:11

    "Grubby mitts"

    After viewing the TV program last evening in which Mr Heaton featured I was left frustrated that such a complicated and topical subject was only given a 30 minute slot. The program was shallow in the extreme and but for David’s comments on the "Chancellors grubby mitts" I doubt that he would have featured in the piece. His "forced" resignation will do nothing to further the debate and I believe will discourage similar independently minded professionals from accepting a position on the GAAR panel. The BBC has done nothing to further the debate other than to give self-serving Politicians the opportunity to press forward their own agendas of further stoking public misunderstanding, nay, hysteria. All in all an opportunity missed and an all round poor show.

    Thanks (12)
    16th Sep 2013 17:45

    Statement from David Heaton

    AccountingWEB got in touch with David Heaton to find out the circumstances surrounding the conference incident and to put his side of the story across.

    He said: “HMRC knew I was a practising, expert tax consultant when I was approached to join the panel. They need someone who understands the fine detail in employment taxes.  I've been a volunteer, via the institutes, helping them make the tax system work for over 20 years, and never before has my integrity been questioned.  I do not sell tax schemes – ask around, and you will find no-one who has bought an off-the-shelf or packaged scheme from me.  EBTs and loans have been the biggest tax scheme around for years, and I have not even sold any of them, although I have helped numerous clients who have wanted to unscramble schemes bought from others once they have realised what a bad idea they can be.

    "As I told Panorama, none of my clients has exploited the rule for which they put me in the pillory, and I have encouraged none of them to do so: it's just one of the quirks of the NIC legislation that is fun to highlight to fellow professionals (I illustrated it with a snap of my baby grandson in his Superman pyjamas). 

    "Panorama and Private Eye had an agenda to embarrass ministers, and I was doing my job. You can't be an expert without knowing where the quirks are found, and you can't lecture an audience about NIC without doing something to make it interesting, which is why training organisations ask me to lecture for them. I'm not about to change my style, although I will in  future demand royalties from the film makers. The filing was secret, the BBC didn’t show me what they were going to use, they simply asked me to comment on some questions. I have no idea exactly what I said on the day, as I do not use a script, so I don’t know what they will broadcast tonight.  The broadcast comment about the Chancellor’s “grubby mitts” is entirely in keeping with my irreverent style, which is intended to enliven presentations even if it offends some people (normally mildly!). I didn’t know whether I was going to be on the GAAR Panel at the time, as they hadn’t told me, but I doubt it would have changed what I said.  I like to think independently and deliberately provoke to keep people awake."

    Thanks (13)
    17th Sep 2013 10:49

    BBC and Government hypocrisy

    There’s quite a lot of hypocrisy here. Firstly, it’s a bit rich of the BBC to start criticizing others re legitimate tax avoidance (which is perfectly lawful of course) after many of their staff have been found to be operating via personal service companies and entering into tax efficient film investment schemes and the like (all perfectly lawful also). The same applies to well paid Government staff operating via personal service companies - which is mainly NIC avoidance. I was actually at this conference and David’s talk was indeed an attempt to lighten up the rather dull topic of NIC planning and that is the context of what he said re “grubby mitts” etc. That aside, who on earth is there who has not spoken about the Chancellor or HMRC in such terms when discussing legitimate tax mitigation planning with clients or potential clients or anyone else for that matter (even if just investing in an ISA)? (It’s not as if he got George Osborne’s name wrong or anything.) I’m sure HMRC and the Chancellor say worse things about people like Mr Heaton (and his clients), who let’s face it are the ones who pay HMRC’s and the Chancellor’s salary and generous pensions (not to mention expenses). It is a prerequisite of these conferences that you are an interesting, lively talker or you will not be invited back as there are feedback forms that people will fill in criticizing boring, uninteresting, unentertaining speakers. Also, his talk was given before he was appointed to the GAAR panel and before the GAAR became law, and so Panorama presumably just “got lucky” with him coincidentally being appointed afterwards, as otherwise this film would not have seen the light of day (it makes you wonder how many more of these relatively boring tax planning conferences they attend incognito) and also the planning he was describing would almost certainly have worked at the time of his talk (and arguably may still do so). There were many other tax planning conferences I attended before the GAAR became law where people were being told to act quickly before Royal Assent of FA 2013 and there is nothing wrong with that. It is a pity that someone of Mr Heaton’s eminence and intelligence has fallen victim to this seemingly indiscriminate anti-tax avoidance witch hunt (although I’m sure he will do OK out of it in the long run by gaining some more clients from the publicity).


    Thanks (4)
    18th Sep 2013 10:08

    Can you enlighten me


    As you were at the conference, can you explain the alledged tax saving as I can't make sense of the reported percentages (41.8% on bonus reduced to 8.4%)

    To my mind as both the bonus and the increasd SMP are liable to tax and NIC, there is no tax saving.So it cannot be tax avoidance - it may be making use of the SMP refund system but that's a different matter.

    Thanks (0)
    18th Sep 2013 10:28

    David Heaton is a very nice bloke and if you phone him he will be able to advise you further on this (but he may want to first check that you are not another undercover journalist!). I can advise on all UK tax issues and (I expect like David) would need to charge a fee for advising on this. Please see my new website below if you want to get in touch:

    Thanks (0)
    18th Sep 2013 17:04

    No thanks, Justin

    If I pay anyone, it will be David!

    Thanks (0)
    17th Sep 2013 11:48

    What did we expect?

    I don't know what else was expected from the BBC when they looked (again) at tax.

    Remember their farcial look at the Barclay brothers which consisted of not much more than the presenter boating and cycling around Sark?

    They clearly have an agenda to 'prove' that the government, accountants and big business are all in league to fleece the exchequer in a terribly unfair way that leaves "little people" paying all the tax.

    Lots of innuendo, lots of half-truths, skimming the surface of tax law and then wheeling out rent-a-gobs like Margaret Hodge to bad mouth anyone who has as much as picked up a copy of Whillan's.

    I honestly don't know why anyone in the profession has anything to do with HMRC initiatives any more.  It's not HMRC's fault, they at least know the worth of outside input, but with the media and politicians distorting the value of the help, it doesn't seem worth the effort.





    Thanks (3)
    17th Sep 2013 16:10

    But on the other hand....

    As with the exposure of the banking/finance industry sometimes the baby needs throwing out with the bath water to get a topic out in the open and kept there.

    The whole sniggering behind you hand approach to tax avoidance has been a badge of our industry for decades but it's time to grow up and, I don't care how much he doth protest now he's been caught, there is no way David Heaton should have used that sort of language, it casts serious doubt over his integrity and judgment.

    As to the programme being shallow or simplistic, maybe, but they have a short slot to put across complex stuff to the public at large so I think they did well.

    Finally, where on earth did the Cons get that wet weekend David Gauke (or should that be Gawp?) from?  Again, the time was limited but he was given ample time to say something worth listening to but just babbled, he could do with a good seeing Margaret Hodge.

    Thanks (3)
    17th Sep 2013 17:19

    The world according to Gawp

    Hear hear on the seeing to by Margaret Hodge. For someone who normally has a lot to say on tax issues Mr Gauke was almost monosyllabic in his responses. Could it be that without a full brief he is as mystified as most none tax people when it comes to the finer detail of tax law?

    Hit the books Mr G you look as though you need to up your game if you want to retain your current brief.

    Thanks (3)
    18th Sep 2013 11:57

    PC gone mad

    so what is this GAAR advisory panel, and who pays for it?  That is worth of an article in its own right. You might consider the practice of highlighting tax "oddities" as a form of whistleblowing - and we all know how PC the government is over whistleblowers.

    Thanks (0)
    18th Sep 2013 12:16

    In a nutshell...

    Man explains law like it is.

    Government embarrassed at being shown unable to write leglislation without loopholes.

    BBC worldview not matched by reality.

    Messenger shot.

    BBC worldview retained.

    Government incompetence unaffected.


    No one surprised.

    Thanks (7)
    18th Sep 2013 13:22

    The BBC? You mean  the

    The BBC? You mean  the paragon of virtue that effectively forced a load of presenters to become self employed in order to reduce the National Insurance costs, that BBC?

    Thanks (0)
    18th Sep 2013 13:49

    Utter farce

    So now we are governed by BBC and Private Eye?

    The comments were recorded at a conference BEFORE his appointment, an expert in his field so recruited to help reduce evasion... knee-jerk reaction to a non-story by the government and forced to step down.

    The country has gone barking mad.


    Thanks (2)
    18th Sep 2013 15:22

    Reading Heaton's comments, I do have some sympathy for him and can understand the support this industry seems to be giving him here and doubtless elsewhere. Despite this I can't help feeling that Prem Sikka is offering some valid observations from a wider, or at least, different, perspective which ought to get heard here.

    Personally I agree with the view that our (and the worlds) current Neo-Classical Economic's driven tax regimes are the real reason why a thing such as the GAAR has become necessary at all. But that is to digress, though only a little.


    Henry George - Progress and Poverty (Mason Gaffney - Corruption of Economics).

    I also like Steve Keen's Debunking Economics.





    Thanks (0)
    18th Sep 2013 15:54

    I see from that Guardian story even more hypocrisy over this 

    Thanks (1)
    19th Sep 2013 15:47

    ref the Guardian article...

    I presume that from the Guardian's point of view it would be terribly, terribly wrong for a mother to take advantage of the NI loophole highlighted by David Heaton but perfactly acceptable for her to take advantage of this quirk of the personal service company regime when paying her nanny. Strange world we live in, isn't it.

    I also notice in passing that the Guardian's article is prompted more by the new criminal status of payments cash in hand without appropriate tax being handed over to HMRC than by the previous nature of the transaction which was merely tax evasion - ie one step beyond anything Heaton might have been discussing. Sigh.

    Thanks (0)
    17th Oct 2013 18:12

    I'm not sure if MP Charlie Elphicke's analysis here is right

    But if it is then this is an interesting double layer of hypocrisy you will see from the links below:


    Thanks (0)