Rabbit in the headlights

Chinese drawing of rabbit
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The Chinese Year of the Rabbit began on 3 February and, being a lunar year, ends on 22 January 2012. According to Wikipedia, those born in the Year of the Rabbit are lucky, amiable and self-assured but can also be detached, superficial and opportunistic.

This got me thinking so I checked a few people.

David (‘Call me Dave’) Hartnett, the Permanent Secretary for Tax and HMRC’s most senior civil servant, was born in the Year of the Rabbit. Last year he was either lucky or opportunistic enough to qualify for the distinction of Whitehall’s most wined and dined civil servant. As revealed by researchers from City University, Dave was entertained 107 times in three years by some of the UK’s biggest banks, law firms and accountancy practices.

Amiable Dave was also the man who starred (if that’s the right word) in HMRC’s first-ever (and remarkably short-lived) YouTube video targeting offshore tax dodgers mentioned in my February 2010 blog.

Dave’s self-assurance certainly shone through in the aftermath of the PAYE coding errors fiasco, which came to light during the autumn of 2010 and affected around six million people. Responding to this monumental bungle, which occurred following HMRC’s switch to a new national computer system (the ‘NPS’) in 2009, Dave initially saw no need to apologise, although he was, it seems, later pressured by the Treasury into doing so.

The NPS was intended to improve the operation of PAYE by collating all of a taxpayer’s records and making sure that allowances and tax rates were operated correctly across all employment or pension income sources. The NPS has the ability to perform automated end-of-year reconciliations, comparing the tax deducted under PAYE with other information which HMRC hold about that person’s income. All well and good, but when HMRC started to use this function over the weekend of 4-5 September 2010 things clearly didn’t go according to plan.

The Chief Secretary to the Treasury, Daniel (‘Call me Danny’) Alexander MP (Year of the Rat: meticulous, industrious and charming but can be intolerant, and scheming) was reported as saying that our Dave was right to apologise ‘but the important thing going forward is to ensure that firstly HMRC does as he says, works day and night to ensure that these problems are dealt with, that those four million or so people who are actually due a refund get that money, and those people who owe more tax, pay it, but in a way that suits their circumstances.’

Come on, Danny: working day and night? I know from personal experience that HMRC turn off their fax machine at 5pm on the dot on a Friday!  Perhaps he should tone down the charm and concentrate on the industriousness.

The Chancellor, Gideon (‘Call me George’) Osborne M.P. was born in the Year of the Boar (note the spelling please). This makes him honest, thoughtful and hard-working as well as gullible, self-indulgent and fatalistic. By delightful contrast, Edward (‘Call me Ed’) Balls M.P., the Shadow Chancellor, was born in the Year of the Sheep, making him righteous and generous, but with the potential to be moody, indecisive and over-sensitive.

As for my own celestial credentials, I was born in the Year of the Dragon: decisive and direct, though apparently with a tendency to eccentricity.

Make of it what you will.

 

*** UPDATE – May 2013***

Since I wrote this blog Dave Hartnett has been in the news again (and again).

In March 2011 he was questioned by the Treasury Select Committee about what Private Eye calls ‘his sweetheart deal’ with Vodafone (Eye 1285 at page 27).  Before the Committee Dave denied the Eye’s £6 billion estimate of the extent of HMRC’s concession over Vodafone’s ‘Luxembourg tax avoidance scheme’. Not a very convincing performance though. You can check it out for yourself here.

The Eye seems to have it in for our Dave. Eye 1287 (page 28) claimed that he privately did a deal that let Goldman Sachs off lightly in relation to tax avoided by use of EBT schemes.

Dave was back before the PAC seven months later.  This time in relation to the deal with Goldman Sachs.  Margaret Hodge was keen to discover if we woz robbed:

Q23 Chair: “Was the taxpayer ripped off in the deal that you did with Goldman Sachs?”

Dave Hartnett: “Absolutely not.”

Q24 Chair: “Did we lose £10 million that we should have had?”

Dave Hartnett: “The sum is smaller than that.”

Q25 Chair: “What was it?”

Dave Hartnett: “I am sorry, but I am now in grievous difficulty of breaching taxpayer confidentiality.”

Q26 Chair: “Well, the figure in the public domain is £10 million.  Our duty as a Committee is to ensure that you provide value for money in the work that you do in settling tax disputes.  There is a lot of money at stake.  There is £25 billion outstanding in tax disputes.  Therefore, in the same way that we delve into the detail when we look at the development of fire stations or whatever, we will delve into the detail here.  It appears that £10 million was lost to the taxpayer because of the deal that you did with Goldman Sachs.”

Dave Hartnett: “Well, I’m sorry.”

Q27 Chair: “We were ripped off.  The taxpayer was ripped off.  That is what it feels like.”

Dave Hartnett: “No, I do not agree with that at all.  A mistake was made.”

Source: Public Accounts Committee – Minutes of Evidence 12th October 2011 HC 1531

In May 2013 HMRC’s ‘sweetheart’ deal with Goldman Sachs was examined in the High Court following action by UK Uncut.   The judge found the deal lawful but ‘not a glorious episode in the history of the Revenue’. You can read Mr Justice Nicol’s judgement here.

Tax lawyer specialising in business tax, SDLT and VAT

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