Channel Four’s Dispatches ‘Secrets of the Taxman’ accuses Chiefs at HMRC of having ties to companies allegedly engaged in tax avoidance; an allegation that HMRC insists does not represent a conflict of interest.
Broadcast on 9 July 2012, Channel Four’s Dispatches programme, ‘Secrets of the Taxman’, alleged that Chiefs at HMRC have ties with companies alleged to be engaged in potential tax avoidance, following an in-depth uncover investigation.Tax Avoidance | Secrets of the Taxman
Dispatches’ accusations that HMRC’s senior directors have connections with companies thought to be involved in the limiting of tax bills, through tax avoidance measures, follow George Osborne’s labelling of tax avoidance as ‘morally repugnant’ – although legal – following reports that comedian Jimmy Carr used the Jersey based K2 Tax Avoidance Scheme to avoid millions of pounds in tax.
Chief of Ethics at HMRC, Phil Hodkinson, is one senior director targeted by the Dispatches team for allegedly earning over £125,000 per year from an insurance company, Resolution, based in the ‘tax haven’ island of Guernsey. Ex-Audit Committee Chief at HMRC, John Spence, was also accused of being the chair of a chain of estate agents and financial group, Spicerhaart, whose staff allegedly offering client’s advice on how to avoid payments of stamp duty; HMRC denied any wrongdoing before the Dispatches programme aired on Channel Four:
“HMRC is satisfied none of the issued raised regarding the conduct of our non-executive directors in their external roles represents a conflict of interest. There directors being valuable experience to our board. HMRC is very successful in challenging tax avoidance, protecting billions of pounds for the Exchequer,” said a spokesperson for HMRC.
HMRC Chief of Ethics, Phil Hodkinson
Tax Haven | Guernsey
Dispatches ‘Secrets of the Taxman’ alleged that company documents for Resolution, an Insurance company that pays Hodkinson more than £125,000 per year, state that being based in Guernsey allows the company to avoid payments of UK income and corporation taxes; Mr. Hodkinson told The Mail on Sunday that he pays UK tax in full on his director’s fees from Resolution. He also told Dispatches that Resolution was not based in Guernsey for tax avoidance purposes and that he was confident that his role at the company did not ‘represent a conflict of interest’ with his part-time HMRC board position.
HMRC Ex-Audit Committe Chief, John Spence Spicerhaart | Estate Agent and Finance Company
An HMRC director until 30 June 2012, John Spence is also Chairman of estate agents and financial services group, Spicerhaart, a company which Dispatches claim advises client’s of how they can avoid payments of stamp duty on property purchases. ‘Secrets of the Taxman’ broadcast under-cover footage of two Spicehaart managers appearing to be offering an undercover reporter stamp duty tax avoidance schemes: One Manager boasts that he can reduce stamp duty by fifty percent whilst the other is said to have helped millionaires from China and India with stamp duty tax avoidance schemes.
“Spicerhaart does not condone any scheme for the avoidance of stamp duty. The two managers featured in your programme were breaking our rules and the board is acting urgently to ensure any other financial activity is identifies and addressed,” Mr. Spence assured Dispatches.
“There was no conflict of interest between being chairman of Spicerhaart and being a non-executive director of HMRC,” he added.
Labour MP and chairman of the House of Commons’ Public Accounts Committee, Margaret Hodge, seemed to disagree with Mr. Spence as she told Dispatches that an HMRC board member’s priority should lie with collecting ‘tax due to the Exchequer’ and is to ‘close down tax avoidance schemes’, and that as the chairman of Spicerhaart, Mr. Spence was ‘responsible for what happens’.
Dispatches ‘Secrets of the Taxman’ did not accuse the HMRC chiefs of doing anything illegal.