As the media continues to turn its spotlight on Goldman Sachs'
alleged interest-free settlement with HM Revenue & Customs
(HMRC), should taxpayers be worried that details of their
confidential tax affairs could fall into the wrong hands, asks EDF
Tax. And will the perpetrators who leaked documents be brought to
task for their gross breach of confidentiality rules?
A former tax inspector for 26 years and now head of Tax
Investigations at East Midlands based EDF Tax, Iain Macleod says:
"HMRC have said, for reasons of taxpayer confidentiality, they
cannot correct in detail a story run by several newspapers saying
that Goldman Sachs was let off some £10m of interest on NIC.
Doubtless, this issue will run for a while and the top tax man,
Dave Hartnett, is due to explain the position to the Treasury
Committee of the House of Commons.
"The stories are based on leaked documents from inside HMRC and
comments from 'sources'. Leaks can add to the gaiety of the nation.
Often we don't care if a politician is embarrassed and maybe banks
are so unpopular at the moment, that leaked information about their
private affairs will trouble few. But, we should be worried
that tax inspectors are talking about taxpayers and passing on
confidential documents to the press. After all, who will be
next?"
According to Iain, HMRC's rules on confidentiality are very
strict and even inadvertent breaches can be punished. "If the
Goldman Sachs 'leaker' was caught," he says, "he or she might well
face imprisonment. And that has to be right as we have every reason
to expect our tax affairs to be completely private."
There are exceptions, explains Iain. He continues: "If you
decide to take on HMRC in the Courts, the details of that dispute
will be out there - although sometimes anonymity is granted in the
early stages.
"Those facing criminal prosecution for tax evasion can expect
details relevant to their case to be in the public domain and under
new 'naming and shaming' provisions, HMRC are expected to start
publishing the names and addresses of deliberate tax defaulters.
But for an inspector to decide off his or her own bat to leak
private material was both personally risky and will be most
concerning for the bulk of taxpayers. If the old HMRC culture of
total confidentiality breaks down, our whole system is in
trouble."