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Damning verdict on the ‘sweetheart deal’ taxman who switched sides

Clear The Air says: Interesting that since our complaint to ACOBA, Hartnett’s listed approvals below, shown on the ACOBA site has grown to 6 jobs instead of the original 4.

It shows Hartnett clearly knows the rules placed on his employment after retirement.

However there is of course no mention of the ITIC – International Tax and Investment Center, directorship employment.

A greedy man with no sense of what is right: Damning verdict on the ‘sweetheart deal’ taxman who switched sides

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Authority: The former top tax official in the country, Dave Hartnett, has accepted a job with major accountancy firm Deloitte

The former taxman whose ‘sweetheart deals’ allowed Starbucks and Vodafone to avoid billions in payments sparked fury yesterday by switching sides to work for the firms’ accountants.

Dave Hartnett was attacked over his lucrative contract with City giant Deloitte, which he has accepted just ten months after retiring from his post as head of HM Revenue and Customs.

Experts said the move raises serious questions about the ‘cosy’ relationship between the Revenue and big companies accused of tax avoidance. Margaret Hodge, chairman of the Public Accounts Committee, accused Mr Hartnett of ‘greed’ and ‘losing all sense of what is right’. Critics said it was little surprise that the 62-year-old had been ‘welcomed with open arms’ by the same firm which had helped big business avoid huge amounts of tax every year. Deloitte dismissed any suggestion that Mr Hartnett had been hired to reveal insider secrets of how to beat the taxman and insisted there was no conflict of interest in the appointment.

Mr Hartnett’s tenure at HMRC, which ended last July, was dogged by claims that he helped multinational companies shave millions of pounds off their tax bills.

He was severely criticised for brokering a deal that saved Goldman Sachs £20million in interest payments. The deal was described by a judge last month as lawful, but ‘not a glorious episode in the history of the Revenue’.

Another time, Mr Hartnett allowed Vodafone – a Deloitte client – to pay £1.25billion of an alleged £6billion tax bill – figures which are disputed by the telecoms company.

After being accused of lying to MPs last year, Mr Hartnett left HMRC and joined HSBC as an adviser on honesty.

Sick: Public Accounts Committee chairman Margaret Hodge condemned the move by Mr Hartnett to join Deloitte

Sick: Public Accounts Committee chairman Margaret Hodge condemned the move by Mr Hartnett to join Deloitte

He has now accepted a one-day-a-week post with Deloitte – the firm that signed off the accounts for coffee chain Starbucks which, entirely legally, paid no corporation tax for three years by channelling its revenues through Luxembourg and Switzerland.

During his time as HMRC boss, Mr Hartnett met Deloitte’s senior British partner David Cruickshank 48 times between 2007 and 2011, including meetings about Vodafone.

Mr Hartnett’s appointment with Deloitte was approved by David Cameron and the advisory committee set up to monitor the ‘revolving door’ between Whitehall and money-spinning jobs in the private sector.

It is subject to six caveats, including a requirement to ensure Mr Hartnett does not ‘draw on privileged information’ from his time at HMRC.

But Mrs Hodge said: ‘Doesn’t it make you sick? It is terrible when people’s individual greed means they lose all sense of what’s right.

‘He better than most knows this isn’t about paying a fair share of tax and playing by the rules. It is about manipulating the rules and aggressively avoiding tax.

‘We always called the deals he reached sweetheart deals. Maybe now we understand why.’

Fellow Labour MP John Mann added: ‘It shouldn’t be allowed.’

Murray Wood, spokesman for the group UK Uncut, which campaigns against corporate tax avoidance, said: ‘It is no surprise Dave Hartnett has been welcomed with open arms by a company which has helped firms like Starbucks avoid huge amounts of tax every year.

‘Governments have for years had a far too cosy relationship with giant corporate tax dodgers and the tax avoidance industry. It means the UK is losing out on millions of pounds of revenue which could be spent on public services.’

Matthew Sinclair, chief executive of the TaxPayers’ Alliance, said: ‘David Hartnett’s appointment doesn’t look good given how the Revenue appeared to reach decisions in a number of controversial cases, especially while many others were left to struggle under the weight of Britain’s hideously complex tax code.’

Deloitte pledged that Mr Hartnett ‘will not work with UK companies or with HMRC’ in his new role.

A spokesman said: ‘He will work as a consultant to Deloitte advising foreign governments and tax administrations, primarily in the developing world.

‘He has significant experience in advising such countries on the development of effective tax regimes.’

Yesterday the Cabinet Office said Mr Hartnett had ‘complied with the rules’.

Mr Cameron’s spokesman said: ‘The recommendation was made by the entirely independent Advisory Committee on Business Appointments, and the Prime Minister follows their advice.’

It approved the appointment subject to conditions stipulating Mr Hartnett must not advise ‘any taxpayer that he has been involved with whilst at HMRC’, nor have ‘involvement in discussions with other fiscal authorities of UK’s confidential tax policy’. However, critics pointed out that a condition banning him from ‘lobbying Government’ on behalf of Deloitte expires in July 2014.

Paul Flynn, a Labour member of the Commons public administration committee, branded the advisory body ‘a pussy cat without teeth or claws’ and ‘virtually completely useless’.

He said: ‘It’s not what people do when they retire that is the problem, it’s what they did when they were in office. They may well take a soft line on the commercial companies that they hope to be employed by post-retirement.

‘The revolving door is more corrupt than the financial scandals we’ve had.’ There was no answer at Mr Hartnett’s £800,000 home near St Albans last night.

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