Monday, May 27, 2013

Britain's former top taxman joins Deloitte

Update: the Guardian has covered this here.

A tweet from Richard Brooks, a former UK Tax inspector, investigative journalist and author of The Great Tax Robbery:
 What is this all about?

Well, it concerns an announcement from the UK's Office of the Advisory on Business Appointments, that it had approved a request from Dave Hartnett, the former Permanent Secretary for Tax at HMRC (the UK's tax authorities) to be allowed to join the Big Four accountancy firm Deloitte on a part time basis. Hartnett has been widely excoriated for his apparent willingness to do cosy 'handshake' deals with HMRC's corporate 'clients,' which many believe have resulted in the loss of billions of pounds of tax which could have been collected had there been the willingness to do so.

All this is rather odd. From Private Eye in 2011:
"Why does accountancy firm Deloitte remain such a favourite of HM Revenue and Customs’ tax boss when it is arguably the biggest tax avoidance drain on the British economy?

A parliamentary question from Tory MP David Davis reveals that HMRC’s business-friendly tax boss Dave Hartnett has met Deloitte UK chairman David Cruickshank no fewer than 48 times since 2006."
Obviously there is no suggestion here of a cosy relationship, or of a revolving door, or anything like that: perish the thought.

And, from The Great Tax Robbery, concerning a cosy deal done with Vodafone over, among other things, the shoveling of some €42 billion through the Swiss branch of a Luxembourg company:
"Years of navel-gazing on the subject of large corporate tax administration had created an extremely business-friendly tax authority. At its apex sat HM Revenue and Customs' ambitious but impressionable permanent secretary for tax Dave Hartnett, valuing his department's 'relationship' with big business above all else.
. . .
HMRC's relationship with Vodafone was closer than most. . . when it came to talking turkey, another familiar face in the world of tax turned up in the urbane person of Deloitte's senior British partner David Cruikshank. Now he appeared as Vodafone's adviser . . . since his firm Deloitte was Vodafone's auditor, his appointment to advise on a multibillion-pound bone of contention posed a normally prohibitive conflict of interest that had to be cleared by the Vodafone board and specially noted in its annual report.

But as Cruikshank was known for getting deals with Hartnett, he was worth it."
So that's OK then. At least the office advising on business appointments did put a long list of caveats onto Hartnett's proposed job with Deloitte.

Now, on the subject of Hartnett taking business appointments, how does this one, from July 2012, sound?
The committee has been asked to consider an application from Dave Hartnett, former Permanent Secretary for Tax at HMRC, who is seeking permission to accept a part-time appointment with HSBC Holdings Plc. 
(The appointment was approved.) From Private Eye last February (Issue 1334, if you want to dig up the full story,) a reference to Sanjay Sethi, who pleaded guilty to charges that he "conspired with HSBC bankers in New York, London and Geneva to hide assets from the IRS [the U.S. tax authorities.]". Private Eye comments:
HMRC pores over thousands of undeclared accounts leaked by a Swiss whistleblower.  Yet in spite of all the evidence, in October 2011 HMRC’s then permanent secretary, Dave Hartnett, agreed a deal with the Swiss government under which it would be “highly unlikely to be in the public interest of the UK to undertake a criminal investigation against Financial Intermediaries [aka bankers]”.

Probed on this by MPs, Hartnett claimed: “It was very unlikely indeed that we would get evidence against Swiss bankers during the course of this.”  But as the Sethi case proves, far from being remote from HSBC’s Swiss tax dodging ways, the London arm of HSBC’s private banking operation was thus right at its heart.

No action has been taken against HSBC or its bankers in the UK.  Which is extremely convenient for the man who was chairman of HSBC private banking . . . and who reported just a few weeks later: “During 2002, excellent teamwork with HSBC’s retail banking operations in the UK, Asia, the UAE and the Americas led to a significant increase in client referrals from these locations”.  The happy banker?  None other than current trade minister Lord (Stephen) Green.
And, from the U.S. Department of Justice, we will just drive the point home:

"The International Bank operated a division in the United States called "NRI Services" that marketed offshore banking services to United States citizens of Indian descent. Through its NRI Services division, the International Bank encouraged United States citizens to open undeclared bank accounts in India."


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