Revenue boss: We did let rich tax dodgers off hook
SCORES of wealthy tax dodgers may have escaped prosecution, the outgoing head of HM Revenue and Customs admitted yesterday. Dame Lin Homer revealed that the tax office is increasing the number of rich individuals it will prosecute for tax evasion each year from around 35 to 100 by 2020.
In a fiery exchange with MPs, the HMRC boss – nicknamed Dame Disaster for her legacy of failings – was forced to admit that this meant some people who should have been prosecuted did not face action.
During a fraught appearance before the powerful Commons Public Accounts Committee, the HMRC chief also revealed that the taxman is ‘unlikely’ to bring any prosecutions over claims that HSBC’s Swiss arm helped wealthy clients
‘Not going to be prosecuted’
evade tax, causing MPs to claim the banking giant had got away ‘scot free’.
Dame Lin also admitted the tax office’s customer service was ‘inconsistent’ as it was found that one in five customer calls to HMRC go unanswered, and those that do get through have to wait an average of six minutes.
HMRC was accused of having ‘one rule for the rich and one rule for the poor’ when it came to cracking down on tax evaders.
Conservative MP Stephen Phillips said: ‘The message which goes out is loud and clear, it’s evade your taxes and you are not going to be prosecuted.’
But Dame Lin – who announced her resignation on Monday after being made a dame in the New Year Honours list – said she ‘strongly disagreed’. Mr Phillips said the fact the tax office was raising the number of prosecutions against wealthy individuals to 100 meant there were ‘very wealthy people who you will be prosecuting by 2020 [who] are at present not being prosecuted’.
Dame Lin, who was accused of being ‘defensive’ over the claims, later responded: ‘It is fair to say there are some people who have evaded their tax in the past and will be in the future who will not be prosecuted because we will never prosecute everyone.
‘It is fair to say over the last five years and over the next, we’ve decided we will prosecute more in a number of categories.
‘There is no particular category of wealth of type that we’ve either left to one side or decided to target.’ Asked again whether this suggested some people who will be prosecuted in future may not have been under the current system, she said: ‘Yes.’
Dame Lin also provoked an angry reaction when she confirmed it was ‘ unlikely’ HSBC would face prosecution.
The MPs said it was ‘extraordinary’ that the bank will face no action even though it was domiciled in the UK. Mr Phillips added: ‘It looks like they have got away scot free.’
The HMRC boss also faced criticism over the tax office’s poor customer service record when she boasted that four out of five calls received in the last three months were answered, up from one in two earlier this year. She claimed this showed things were getting ‘better and better’.
But Mr Phillips retorted: ‘It’s not really “better and better” is it – 81 per cent of calls answered within six minutes?’
Dame Lin will retire from HMRC two years early in April with a pension pot worth more than £2million.
She has been accused of leaving chaos in her wake in a 35-year career in the public sector, including as head of the now defunct Border Agency where her tenure was described by MPs as ‘catastrophic leadership failure’.
But Chancellor George Osborne said she had ‘made a real contribution to public service modernisation and transformation’.
DAME Lin Homer in the dentist’s chair! Whitehall’s ‘Dame Disaster’, head of Her Majesty’s Revenue and Customs (but for not much longer – she has just announced her departure) spent a tricky couple of hours in front of the Public Accounts Committee. Those of a delicate disposition, look away now.
Much of the time she was shouted at by the committee’s attack dog, Tory MP Stephen Phillips (Sleaford & N Hykeham). Long before the end she was shouting back.
It was basically him saying ‘you’re useless!’. Eventually she snapped and started shouting back ‘no I am NOT useless!’, or words to that effect.
Mr Phillips is one of London’s best-paid barristers, used to darting from bundle to bundle of legal documents in the quest for detailed clarity.
A year in which m’learned friend fails to earn more than £700,000 is, frankly, something of a disappointment to this beetle-eyebrowed fellow, a creature of punctilious enunciation, razor logic. If he has a bog-brush topknot of hair on his balding head that may be because he spends so much of his life wearing a barrister’s wig and it has left his barnet a funny shape.
Dame Lin? A big-picture person. Detail may not always be her forte. From time to time during this excruciating interrogation she tried to hand over to one of two colleagues, whom she called Jennie and Simon. First-name mateyness – it’s the caring, sharing, Homer way.
Does she have show- and- tell mornings for her top executives? Do they sit round the playroom every morning before work, singing nursery songs?
Mr Phillips was uninterested in Jennie and Simon ( who both seemed quite clued-up) and kept wrenching the conversation back to a bug-eyed, increasingly brittle dame. Unsportingly, he kept alighting on specific words and paragraphs of official paperwork. What did she make of them? Eh?
He might as well have tried to teach jazz trumpet to one of those Brazilian tribal people with a Wagonwheel in their upper lip.
He felt Dame Lin, as our top tax collector, had not been tough enough with the likes of HSBC, Amazon and multi-millionaire tax evaders. ‘There seems to be one rule for the rich and one rule for the poor,’ he said.
Dame Lin denied this with all the vehemence of a distinctly fed-up mouse which, after years of persecution, has finally had enough of being tortured by a tomcat. Draw- ing herself to her full height in her chair, she declared: ‘We will use our full toolkit!’ That was telling him.
‘Evade your taxes and you will not be prosecuted – that’s your message, isn’t it?’ he asked her.
HE also alleged that she ‘hadn’t the faintest idea’ about the deterrent effect of prosecutions. This led to an almighty hoo-hah where she yelped ‘actually, that is wrong!’ I do like that ‘actually’.
In his legal career Mr Phillips has put questions to some of the most lumpen low-lifes of the land, its Bill Sikeses, its Fagins, its most muddled pea-brain alibi-artistes.
A top silk, in the course of professional life, encounters all classes of witness. Yesterday Mr Phillips gave the impression he had seldom been so exasperated as he was by dear old daffy Dame Lin. His eyes darting from file to file, he ordered her to look at paragraph 316 of some report. They ambled along for a minute or so until it became clear that they were talking at odds.
‘I thought you referred to paragraph 315,’ mumbled Dame Lin.
‘SIX-teen!’ bawled Mr Phillips, flicking a sheet of paper so hard in its ring-folder that there was a horrendous ‘rrrrrr-ip’.
A moment later Dame Lin, with an absent-minded tone, ‘oh yes, I was lookin’ at the right one’.
By now Mr Phillips was twitching markedly, his shoulder having assumed a life of its own and one of his cheeks doing a little dance. She had driven him nuts.
He won’t be the last.