HMRC Appoints New Directors But Is It Hopelessly Out of Touch?

On September 1 HM Revenue and Customs (HMRC) announced the appointment of two new Non-Executive directors.

 

Simon Ricketts and Mervyn Walker have joined the Board, whose responsibility is to help HMRC “deliver its agenda and maximise its performance”.

 

Ricketts has most recently been the CIO of Rolls Royce but earned a MSc in Statistics from Sussex University and came through the London Business School’s Accelerated Top Management Programme in the 80s.

 

Mervyn Walker, by all accounts, retired from his role as Group Director of HR and Corporate Affairs with Anglo American earlier this year and worked at British Airways and Mondi before that. Education-wise, he has a law degree from Oxford.

 

Tellingly, neither of these appointees have a background in tax and accountancy, though Ricketts has been a non-executive director for the National Savings and Investment Bank since 2007.

 

David Gauke, the financial secretary to the Treasury had the following to say:

 

“These appointments provide a rich mix of Board-level experience in major corporations. They will bring new and further capability and credible challenge to Board discussions.”

 

Philippa Bird and Norman Pickavance are the ones leaving the team to make room for the new appointees. Now, of the eight non-executive board members remaining, only one, Edwina Dunn, is a woman and the background as ethnically white (as of September 2014). Worse still, Volker Beckers, former npower boss, who has served on the board since January 2014 was accused of running a Maltese tax avoidance scheme that helped the energy firm dodge millions in corporation tax. (Read more about tax avoidance in this post from Alexander & Co Accountants).

 

Some, including prominent economist and tax blogger Richard Murphy, have commented that this is all indicative of an organisation that needs a reshuffle and succumbs to the white, male prejudices of so many other organisations. It’s also unlikely that the board is familiar with the increasingly complex tax landscape in the UK at present.

 

The organisation is of course no stranger to controversy, whether that be ineptitude, like losing child benefits records, or real discrimination. In August 2010, seven HMRC staff members were dismissed for knowingly underpaying benefits to ethnic-minority claimants. David Arnett, the previous chairman of HMRC, was also widely criticized for his “sweetheart deals” and a stunt “corporate tax dodge award” In 2007-2008, for much of which Arnett was acting chairman, HMRC overpaid tax credits to the value of £1 billion.

 

Whatever the case, it is clear that the diversity is not high on HMRC’s priority list. And there’s obviously an element of hypocrisy to the organisation. If you announce stricter measures to clamp down on tax avoidance schemes but appoint someone who ran such a scheme, then clearly something is going wrong.

 

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