Margaret Hodge

HMRC’s Chief Executive Lin Homer appeared before the Commons Public Accounts Committee yesterday to face criticism HMRC is once again overstepping the mark in its enthusiastic pursuit of tax avoiders. The subject under discussion was not the avoidance of tax, however – Homer and other senior staff were before the PAC to discuss how HMRC dealt with a recent whistleblowing case in which a £10 million “sweetheart” deal with Goldman Sachs was revealed.

Former HMRC lawyer Osita Mba disclosed details of the Goldman deal to the National Audit Office under the Public Interest Disclosure Act in 2011. Upon discovery of the disclosure, HMRC used powers granted by the Regulation of Investigatory Powers Act to examine Mba’s emails, phone records, Internet search history, belongings and even the phone records of his wife, to determine if he had been speaking to the press.

Discussing HMRC’s investigatory tactics yesterday, Chair of the PAC Margaret Hodge said she was shocked “to her bones” at Mba’s treatment, and sought assurance that powers granted under RIPA (originally put in place to tackle terrorism) would never again be used to investigate whistleblowers. Homer, however, declined to give such assurances, saying that HMRC “cannot offer carte blanche assurances for evermore that we won’t use [RIPA].”

The latest revelations about HMRC’s overzealous conduct in matters pertaining to tax avoidance could not come at a worse time – the taxman is already under fire for new powers announced at the 2014 Budget which will allow them to drain the bank accounts of tax avoiders without warning. HMRC faced criticism shortly before the Budget for “alarming” investigations designed to uncover avoidance by small businesses and freelancers, and was also granted powers to break the speed limit in pursuit of suspects in January – a privilege previously reserved for the Emergency Services.

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