Fairness and Jesse Norman 2011 v. 2019

The Financial Secretary to the Treasury, Jesse Norman MP, is not long in his post and yet he is already overwhelmed. Since having asked for information as to the impact of the loan charge his inbox has been swamped with personal stories. We have seen some of these stories; a sound night’s sleep does not follow having read them.

The issue of the loan charge has been in the forefront of his mind before: “the situation is a mess. HMRC is not properly accountable to minister or parliament; neither has any ability to assess its performance except through the national audit office, indirectly and long after the event”.

The above quote is from a clearly frustrated Mr Norman in an article in October 2011 in The Guardian. The context was the “deal” that a bank reached with an ex HMRC Director General. In that deal, David Hartnett “allegedly” ignored the advice of HMRC legal teams, policy positions and basic principles of fairness. He took a unilateral decision, assumed the authority to execute it and “shook hands”.

A while later Mr Hartnett also publicly named an individual, linking him with HMRC publicity over the use of tax avoidance. This led to litigation and whis actions were found to be justified – in this instance – the Court was clearly unhappy at HMRC breaching its own policy.

Mr Norman was entirely correct and within his rights to express his frustration. A department which is unaccountable and seemingly unable to formulate or deliver a consistent and sensible, fair, transparent policy is far from ideal.

But now, Mr Norman is the “Minister of Tax”. Although HMRC is not a ministerial department, the Financial Secretary to the Treasury is usually in that role and answers questions in Parliament and in committee about HMRC.

Let’s quote another piece from the article: “It very much looks as if confidentiality is being used as a shield to hide bad decisions by officials.”

His successors at the Treasury Select Committee questioned senior HMRC officials in January 2019. It was put to them that the loan charge (a retrospective tax that brings into charge alleged income from 1999 to date) is a sticking plaster to hide the fact that information was held but had not been acted upon, in time – or in many instances – at all. This was denied – a la Mr Hartnett – but without any evidence being produced to defend the statement, due to confidentiality.

Mr Norman is perfectly placed to pierce the confidentiality armour that HMRC assumes. He is able to address the manifold maladministration errors made by it and to provide a cure that is fair.

We therefore ask him to use his authority and support his own expressed views in answering the following:

  1. Is it fair that where a time limit for enquiry has expired, a taxpayer’s protection can be trampled on by the loan charge?
  2. Is it fair that where some have tax enquiries in some years and others do not, that the former group is seen as being “correct”?
  3. Is it fair that where tax enquiries have been made but not acted upon by HMRC for many years, that they can be reactivated?
  4. Is it fair that HMRC can hide behind a wall of confidentiality and not be accountable?

We think the answer to all the above is, no.

What does Mr Norman think now that he has reached a position where he can address his previously expressed views? What action will he take in light of the evidence of contractors bearing the brunt of the process?

Read the full 2011 article here: https://www.theguardian.com/commentisfree/2011/oct/14/goldman-sachs-tax-inland-revenue