Tax boss Lin Homer in stand-off with Parliament over refusal to hand over documents
By Alex Varley-Winter | 16 July 2012
“We need access to those papers to do our job properly”
– Margaret Hodge, PAC chairwoman, talking to Lin Homer, HMRC chief executive
UK tax chiefs are refusing to hand over to MPs documents detailing controversial tax deals struck with five large corporations.
MPs are locked in a battle with bosses at HM Revenue & Customs (HMRC) over the deals, including settlements with Vodafone and Goldman Sachs.HMRC’s chief executive, Lin Homer, has personally rebuffed the request from MPs sitting on the House of Commons public accounts committee (PAC).
The MPs want details of the settlements and HMRC’s legal advice on them. The corporations that struck three of the five deals have not been named so far.
But Homer insists that taxpayer confidentiality prevents her from showing the documents to the cross-party committee.
A whistleblower revealed last year that HMRC excused Goldman Sachs, the investment bank, from paying up to £10 million in tax on bankers’ bonuses.
HMRC was also accused of letting off Vodafone, the world’s biggest provider of mobile telephones, from paying up to £8 billion in taxes by accepting a £1.25 billion settlement.
The PAC believes that taxpayer confidentiality should be waived for the five deals. It has even approached the attorney general, Dominic Grieve, for advice on how it can extract the documents from HMRC.
MPs on the committee contacted by Exaro said that they were unable to comment on the row, but are expecting to produce a report on the settlements this autumn.
It marks the latest round in Whitehall’s war on Parliament, as MPs try to hold senior civil servants to account. The clash was triggered by the PAC’s questioning of Anthony Inglese, HMRC general counsel, last year over the Goldman Sachs deal.
An exchange of letters between Sir Gus (now Lord) O’Donnell, writing in his last days as cabinet secretary and head of the civil service, and Margaret Hodge, who chairs the committee that acts as Parliament’s spending watchdog, sets out the constitutional stand-off between MPs and Whitehall.
The National Audit Office (NAO) examined the five settlements, and concluded that they were “reasonable, and the overall outcome for the exchequer was good.” However, it criticised HMRC for failing both to follow official procedures and to consult its own lawyers before agreeing to settle.
The PAC held a private session with HMRC chiefs, including Homer, and Sir Andrew Park, the tax judge who had advised the NAO, at the end of last month.
Hodge told Homer in an open, but previously unnoticed, exchange: “Our view is that you do have the discretion – I know that this is contested – and it is also in the public interest, to enable us to have at least the background documents that you gave to the NAO, so that we can understand better the systemic issues that have been of concern to the committee, by looking at the details of the particular cases.”
“The committee has discussed this, and, of course, we would be happy to look at the documents in confidence, if that is your wish. But we feel that we need access to those papers to do our job properly. Are you willing to use your discretion to enable us to hold you to, what I consider to be, proper public account?”
Homer replied: “Our duty to taxpayer confidentiality prohibits me from sharing, unless either I do so in pursuit of my function as a commissioner, or there is specific statutory gateway.”
Vodafone rejects the claim that it was let off as much as £8 billion in tax by striking a “sweetheart deal” with HMRC. It says that, after nine years of highly complex tax litigation, “the outcome was a full and final settlement with HMRC of £1.25 billion reflecting all liabilities.”
Goldman Sachs has highlighted the NAO’s finding that the settlement was “reasonable”, saying that the bank and its staff paid more than £10 billion in taxes in the UK in the last decade.
An HMRC spokesman told Exaro: “HMRC does not consider that any of the exceptions [on taxpayer confidentiality] apply here, and we have been as helpful in answering the PAC’s questions as we can.”