Towards the Promised Land

A parliamentary report confirms what Private Eye, the Guardian and UK Uncut supporters have long known to be true: that voluntary taxpaying isn't confined to Greece and Italy. Over here, the more you owe, the less you pay.

What's really shocking about the latest report is the simplicity of this particular scam. In Shaxson's Treasure Islands, the vast panoply of tax-evasion scams is laid bare: companies acquiring 'debts' to other companies in the same group but based offshore so that all the profits magically become losses, or every banana in the world being virtually shipped to one tiny tax-free island, and myriad other schemes.

But that's too complicated. Vodafone and Goldman Sachs found a much better system.
1. Refuse to pay your tax.
2. Make it very clear that you have more and better lawyers than the government.
3. Wine and dine officers of the Revenue and Customs service ('Don't cheat: eat'). They will soon be your friends. And eventually your employees.
4. Accept the head of HMRC's illegal offer of a tiny settlement with a handshake. (Vodafone owed £6bn and paid £1.25 bn). Don't worry about oversight: Dave Hartnett both shakes hands and is the authorising officer, very conveniently. And when that pesky parliament pokes its nose in, HMRC will insist on 'commercial confidentiality'.

Why break the law when you can own the government, whichever party's nominally in charge?

They work for you?

Private Eye has being pursuing the head of the tax service, Dave Hartnett for quite some time. They allege that he personally - and illegitimately - oversaw cosy deals which allowed Vodafone to pay us £1.25bn instead of £6bn, and Goldman Sachs get away with £10m in interest they owed us (a criminal offence). This of course, looks like unequal access to justice: major corporations get to decide what if anything they hand over, whereas the rest of us cough up like good little citizens.

Hartnett gave evidence to Parliament recently. Did he confess his errors? Not quite.

Revenue officials did not follow correct procedures in two high-profile cases that could have left taxpayers millions of pounds out of pocket… an official neglected for a time to inform the board, leading to a delay which could have resulted in less tax being collected

By 'official', we should understand 'David Hartnett', not that he was about to admit it: he did secretive, personal deals with these companies, in breach of the law. Most startling was this nugget:

Hartnett refused to explain exactly what went wrong, how much tax may have been lost or confirm which companies may have escaped their full tax commitments. "…Mr Hartnett has refused even to indicate whether interest was paid by Vodafone on the tax due, despite confirming that it is an offence not to pay interest on tax owing… At present MPs can be briefed in confidence by the intelligence services, yet cannot find out any details of improper private tax deals done by the taxman. Even Treasury ministers are left in the dark."

So our elected representatives can compel spies to spill the beans, but the tax service doesn't even have to tell the Treasury what deals it cuts, let alone MPs or - god forbid - the citizenry. Banana, anyone?