Treasury to HMRC: "Don't be too hard on Amazon"

  1. HMRC
    Francois Badenhorst

    Francois Badenhorst Business Editor, UKBF & AWEB Staff Member

    91 18
    6 |

    A newly released recording suggests HMRC was told by the Treasury not to be “too hard” on Amazon.

    The recording is from a conversation between Guy Westhead, at the time a senior member of HMRC’s VAT policy team, and Richard Allen, a VAT tax campaigner. The audio clip has been published by Jolyon Maugham QC on his blog Waiting for Tax.

    In the clip, Allen addressed his concerns that “ministers have some kind of agenda to basically not annoy Amazon”, pointing to the retail giant’s ardent lobbying of regulators in the US as an example.

    In response, Westhead seems to acknowledge there had been some pressure from the top. “I’ve heard of that,” he replied to Allen. “I’ve heard from the Treasury; the Treasury didn’t want us to be too hard on Amazon. But I think that was a brackets ‘yet’ close brackets.”

    The leaked audio comes after a recent PAC report which found the Amazon and eBay marketplaces were being used to carry out extensive online VAT fraud, enabling foreign sellers to undercut by UK businesses by up to 20%. The report chastised HMRC for being “too cautious” in its approach and not doing enough.

    Asked whether the recording was an accurate reflection of how the tax authority applies the law, a HMRC spokesperson told UKBF: “We would never give a company or individual preferential treatment. Multinationals must pay all taxes due and we don’t settle for less. Last year alone, HMRC secured and protected over £8bn in additional tax revenue from the largest and most complex businesses.”

    They added, “HMRC has a strong track record of tackling avoidance, evasion and non-compliance and the UK has one of the lowest tax gaps in the world. The ‘tax gap’ is the difference between what should be collected under the rules and what HMRC actually collects.”

    But despite the tax authority’s insistence that there’s nothing awry, the recording will only add to the suggestion that one rule exists for multinationals and another for small businesses.

    Maugham specifically has been a prominent public critic of HMRC’s perceived lax enforcement. He has postulated extensively in the past that something was impeding HMRC’s motivation in pursuing major multinationals.

    Speaking to UKBF, Maugham said the recording bears out what many have been saying for years “about the two-tier approach to taxation operated by this government”.

    “This is a very senior officer at HMRC speaking in his own field, saying very clearly and explicitly that HMRC comes under pressure from Treasury as to how it applies the law in the case of US tech companies.

    “I’m sure that Treasury is persuaded that the UK benefits from it being perceived by US tech companies as a place where they can do business. How they’ve come to that view is a  matter of speculation.

    “What troubles me, is what it means for trust in the establishment, and democracy more generally, if those in positions of high authority are revealed to have been inconsistently applying the law.”

  2. Mr D

    Mr D UKBF Legend Free Member

    16,119 1,798
    So do HMRC implement the law set by MPs or not? If not, what can be done to improve HMRC?
    The final paragraph made me smile, thanks. His recent past actions regarding democracy are.... interesting.
    Posted: Jan 25, 2018 By: Mr D Member since: Feb 12, 2017
  3. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

    10,525 2,130
    It also seems the Chief Constables who swear to uphold the countries laws are allowed to pick and chose what ones they do and what ones they leave alone especially fraud
    Last edited: Jan 26, 2018
    Posted: Jan 26, 2018 By: Chris Ashdown Member since: Dec 7, 2003
  4. Tom Gardner

    Tom Gardner UKBF Contributor Free Member

    52 2
    I'm not sure if putting blame on HMRC is fully justified. This suggests that the pressure is from the Treasury.
    It would be unusual for HMRC to fully ignore the treasuries view
    Posted: Jan 26, 2018 By: Tom Gardner Member since: Dec 9, 2017
  5. Mr D

    Mr D UKBF Legend Free Member

    16,119 1,798
    Why have law at all if treasury can override?
    Posted: Jan 26, 2018 By: Mr D Member since: Feb 12, 2017
  6. Sam Drury

    Sam Drury UKBF Contributor Free Member

    65 10
    We (tax paying businesses) should sue them to actually uphold the law.
    Posted: Jan 30, 2018 By: Sam Drury Member since: Sep 15, 2017
  7. Noah

    Noah UKBF Ace Free Member

    1,200 299
    I think that process is called "judicial review" - have at it.
    Posted: Feb 7, 2018 By: Noah Member since: Sep 1, 2009