Dave Hartnett, HMRC's permanent secretary for tax, managed to put his foot in his mouth over the weekend.
He kicked off by refusing to apologise for the oncoming storm of extra demands for tax from HMRC, resulting from their well publicised cock up over tax over/underpayments that affect between 6-10 million people.
Hartnett denied there had been any errors, and said he saw no need to apologise.
The Guardian quoted him from BBC Radio 4's Money Box programme:
"I'm not sure I see a need to apologise.
I've read the papers, listened to the media and heard stories of HMRC blunder and IT failure – neither of those are true.
Every country that I know of that has deduction of tax from wages and salaries has to do a reconciliation at the end of each year and we're doing one.
I don't think we are extraordinary. Once or twice in the past the numbers have been very large – sometimes they're less. It depends on how the system has been operated and what issues there have been. We didn't get it wrong. This needs to be reconciled.
We're going to be as sympathetic as we can to anyone who comes to us and says you're trying to take too much money too fast.
If the results of the exercise we're now engaged in show that there are aspects of our plans which are not going to work well for the work we're trying to do or for our customers, we will consider changing them.
I am addressing the issue and I think the nation needs me to do just that."
Tory MP Ian Liddell-Grainger, who chairs the all-party parliamentary group on taxation, thought that Hartnett was talking bollocks wrt the claim that the repayment demands were not due to any "mistake" by the authorities.
Warnings had been ignored for years that the system was not "up to it", he said – accusing Hartnett of showing the typical "arrogance" of senior civil servants.
"It is a mistake. We have been warning for a long time that structurally this is not up to it. It comes down to a 21st century computer system and a 1940s PAYE system."
I would point out that in the real world Dave those who have, through no fault of their own, underpaid tax (because they assumed that HMRC had got the figures right) will have spent the money on "luxuries" such as food, rent and heating.
Anyhoo, a few hours is a long time in farces.
Within hours of refusing to apologise Hartnett, having been subjected to a barrage of criticism from taxpayers and MPs (George Osborne, the Chancellor, was said to have been incandescent, Lord Oakeshott said Hartnett's response made the BP chief, Tony Hayward, "look like a model of disaster management" adding that Hartnett was "in a world of his own; I wonder what planet he is on? This is the latest in a series of management failures in the HMRC going back many years. If Mr Hartnett cannot see why he should apologise for this one, then he really should be reconsidering his own position."), issued an apology.
He said that he was "deeply sorry that people are facing an unexpected bill.
Everyone in HMRC is working hard to make this as painless as possible.
I apologise if my remarks came across as insensitive. I am working flat out with my colleagues to ensure everyone's tax is correct and the new computer system will help us do this.
It was this new system that revealed the extent and size of reconciliations required – and will help us be more accurate in future – but we do not underestimate the distress caused to taxpayers and, once again, I apologise. ".
(Source The Independent)
As to whether Hartnett really meant it, or was merely acting under orders is another matter.
As to why Hartnett (when he was head of the IR inquiry branch he was personally responsible for leading the HMRC investigation into Ken Dodd's tax affairs in the 1980's - you will recall HMRC lost that one when it went to court), Clasper (who works 2 days a week for HMRC) and "Dame" Strathie (and other senior executives of HMRC) are still in their jobs is something that our "beloved" political masters can answer (but probably won't).
Were these people to be removed/step down, their replacements would doubtless be highly skilled in political spin but lacking the necessary management skills/experience to turn HMRC around.
Frankly speaking it is my belief that, in its current form, HMRC is beyond redemption.
My advice is to undo the merger of IR and Customs, take away responsibility for administering tax credits (or simply replace them with a higher rate personal allowance) then work from there to massively simplify the tax system.
(Factoid: the donkey in the picture is called Dilbert - my thanks to the loyal reader who sent me Dilbert's photo and gave me permission to use it - Dilbert wishes to make it clear than any physical resemblance to Hartnett is an unfortunate coincidence).
Tax does have to be taxing.
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