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.
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.