Another fine mess at HMRC

Today’s report by the Public Accounts Committee hasn’t so much been released as detonated onto the Westminster scene. The Exchequer is owed around £25 billion, it suggests, from major companies that have been handled too leniently, or just plain wrongly, by HM Revenue & Customs. And much of the blame is attached to Dave Hartnett, the outgoing civil servant in charge of revenue collection. Interviewed on the Today Programme earlier, the chair of the committee, Margaret Hodge, implied that Hartnett had too ‘cosy’ a relationship with big business. She went on to add that, ‘you’re left feeling that the sort of deals that are made with big business — “sweetheart” deals in some cases — are different from the way in which corner shops are treated, small businesses are treated, or hard-working families are treated’. It’s a combustive claim, not least because it will lend parliamentary heft to the arguments put forward by all those Occupy and Uncut types.

There is an argument, albeit one I don’t find entirely persuasive, that big businesses such as Goldman Sachs actually deserve special treatment — they do, after all, contribute huge amounts to the nation’s coffers, and perhaps their tax status is complicated enough to warrant negotiation and horse trading. But judging by this morning’s exchanges, HMRC have instead chosen to simply deny the Public Accounts Committee’s accusations. ‘The report is based on partial information, inaccurate opinion and some misunderstanding of facts,’ is how one of the department’s spokesmen put it earlier. ‘The idea Dave Hartnett cuts a large tax bill in return for a glass of wine and a cheese sandwich is just plain nonsense.’

But whatever the truth of the matter, it’s clear that HMRC is a department riddled with problems. I wrote, a couple of months ago, about their persistent blunders and oversights — and now this. The coalition has done great work in making Whitehall processes more transparent and streamlined, but that has often been on the spending side of the ledger. Now might be the time for George Osborne to open up the revenue side too.