HM Revenue and Customs needs to inspire a greater degree of public trust in its decisions in the wake of Google’s controversial £130m 10-year settlement with the tax authority, the chair of the Public Accounts Committee has said.
Meg Hillier was speaking to Civil Service World after yesterday’s grilling of two Google executives and a subsequent session with HMRC permanent secretary Dame Lin Homer, business tax director general Jim Harra, and tax assurance commissioner Edward Troup.
Google’s deal was signed off by tax assurance commissioners after a six-year investigation, but the figure released last month prompted a media and public outcry.
Homer, Harra, and Troup – who make up half of HMRC's tally of commissioners – told MPs that tax confidentiality rules stopped them from disclosing details about how the settlement was reached, but referred to the commissioners’ role in scrutinising the deal.
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MPs, led by Richard Bacon, questioned the panel over the extent to which commissioners could be described as tax experts, something Homer freely admits she is not.
Hillier said there was “a real issue of taxpayer confidence” in the settlement reached by HMRC.
“We’re pushing for more transparency. Lin Homer says the legislation does not allow them to do that,” she told CSW.
“We want more expert assurance on the part of tax commissioners [...] we were particularly challenging on how independent are you, and what experience do you have.”
In what is likely to have been her last appearance before the PAC before stepping down from her current role next month, Homer told MPs she would have no authority over HMRC’s tax commissioners if she were not a tax commissioner herself.
“I’ve taken the judgement that I will interrogate the performance of my tax commissioners, and whist I don’t sit on the settlements, I have taken a strong interest in whether, as a tax administration, we are working effectively and I think being a commissioner allows me to do that with authority,” she said.
Bacon said it “ought to seem self-evident” that the people who carried the job title “tax commissioner” were all tax experts.
Hillier told CSW that the committee expected to publish its report on the Google affair within one month, and would reserve the right to recall witnesses if new data – or more favourable settlements elsewhere in Europe – emerged.
Tax assurance commissioners were introduced in 2012 as part of a package of reforms. They scrutinise proposed resolutions for disputes with large corporations. According to HMRC, a panel of three commissioners reaches a decision on each individual case.