New HMRC oversight…but is it enough?

25th July, 2019

New HMRC oversight…but is it enough?

The call for greater scrutiny

For some time now many have called for greater scrutiny of HMRC as a requirement to support natural justice and certainty in our tax system.  As a non-ministerial government department, it has little accountability to Parliament. There are many examples of Parliament committees attempting to hold HMRC and its Senior Civil Servants to account for its actions or in-actions only to be stonewalled by claims of taxpayer confidentiality and “carrying out the will of Parliament”.

Yesterday we had a written statement to the House of Commons from Financial Secretary Jesse Norman. This announced that a ‘Professional Standards Committee’ will be formed to advise the Commissioners of HMRC.

Most will be aware that WTT has called for greater scrutiny of HMRC’s behaviour for many years and it was Graham Webber’s recent oral evidence to the House of Lords Economic Affairs Committee that has resulted in the new committee being formed. Having seen first-hand how many of our clients have been unfairly treated by HMRC officers, we welcome the additional oversight and accountability. We are also grateful that The Lords listened to our evidence and that of our peers – and for calling on HMRC to take this step. 

Too close for comfort

However, the devil is always in the detail. At this point we have very few particulars as to how such a committee will work.

We do know that it will take advice from a number of independent experts, but it is worth making the distinction that it will not consist of independent experts.  This is a subtle but important difference.

The committee will advise the Commissioners of HMRC, not HMRC as a body.  The Commissioners are a distinct body of staff within HMRC. They are responsible for the administration of the department, normally at Director General level and on the executive board.  If the committee is constituted of HMRC staff to advise the Commissioners, those committee members must be very senior themselves. Most likely, they will be policy experts at Deputy Director and Director level i.e. immediately line-managed, or one management layer away from those that they are to advise.

Are those that ‘advise the committee’ therefore simply just doing their job?  In any case, that sort of bottom up scrutiny does not sit well with me.The prevalent culture is one where criticism and dissent from the ranks is regularly punished by threats of poor performance markers and careers being limited.

The Purpose?

It was also announced that the committee will not review individual cases or government policy leaving me scratching my head as to what the purpose of this committee is.

Not for the first time, Jesse Norman has announced a measure that is the equivalent to selling the public a Ferrari only to lift the bonnet and find a Fiat 500 engine.  The last one of course was his ‘generous’ concession on the loan charge and closed years which when scrutinised probably affected 0.1% of those in the firing line of the ludicrous policy.  For someone who once called for greater scrutiny of HMRC this appears to fall woefully short of that. (See: https://wttconsulting.co.uk/fairness-and-jesse-norman-2011-v-2019/)

In their report, the Economic Affairs Committee said:

“It may be time for Parliament to rethink how it holds HMRC and the Treasury to account for the fair treatment of taxpayers. There is considerable support for new oversight of HMRC and a compelling need to address the view that HMRC is not sufficiently accountable.”

I suspect that, once again, the House of Lords will be disappointed with what has been offered up in response to the report they have spent so much time researching, analysing and publishing. Potentially another missed opportunity, but we wait with bated breath for the detail.