Monday, July 16, 2012

Meet the Jolly Dodgers: new top UK tax man

The UK magazine Private Eye has an important article (subscription-only) entitled 'Meet the Jolly Dodger' which looks at the new chair for the board of Her Majesty Revenue and Customs (HMRC:) Ian Barlow.
"Step forward Ian Barlow, who has built a career on tax scheming every bit as contrived as comedian Jimmy Carr's dodge - but far more costly to the UK.

Barlow was head of tax at accountancy firm KPMG from 1993 till 2001 and then became senior partner in London until 2008. Over this period he was directly responsible for selling some of the most aggressive tax avoidance schemes on the market."
Following the series of scandals that have dogged HMRC chief Dave Hartnett, it is shocking that the UK should see fit to continue in the same vein. The Eye describes a number of schemes Barlow has been involved in, including one where internal KPMG papers admitted that
"in our view HM Customs & Excise will regard these planning arrangements as 'unacceptable tax avoidance." (it did, and so did the courts)
It then notes that Barlow arrives to chair HMRC in the middle of a conflict of interest, amid a dispute between HMRC and a firm where his is a non-executive director, over an offshore scheme. Barlow has said in the past:
"There is no meaningful distinction to be drawn between acceptable tax planning and unacceptable tax avoidance."
The Eye concludes in its own inimitable style.
"What next? Bob Diamond [TJN: the disgraced boss of the UK's Barclays Bank] for the Bank of England, no doubt."
In the HMRC press release, it notes that Barlow will have responsibility for, among other things,
"ensuring HMRC delivers its performance and customer service objectives."
What are those customer service objectives? Well, Treasure Islands notes:

"HMRC used to assign a ‘case director’ to investigate multinationals; this is now a ‘customer relationship manager’ charged with building a happy connection. After a review in 2006, promising better ‘customer service’ and ‘greater mutual respect and trust’, average times spent on international investigations fell from thirty-seven to eighteen months.

‘We used to have a priority to collect tax,’ my informant said, ‘now we have a priority to have a good relationship. We have got into a situation of persuading ourselves that it is a win-win to have businesses pay their taxes voluntarily, rather than have us take them to litigation.’
All in all, it does not look good for the ordinary people of Britain - and of developing countries either.

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