APPG reveals HMRC hired contractors using disguised remuneration.
In a Freedom of Information request to HMRC, the All-Party Parliamentary Loan Charge Group was told that five contractors were identified as being open to the loan charge as they had benefited from disguised remuneration (DR).
The contractors were hired by a wholly-owned subsidiary company, Revenue and Customs Digital Technology Services Limited (RCDTS).
The APPG report stated: ‘As has been previously provided, in November 2018, HMRC was aware of five individuals who had a history of using DR schemes and providing services to HMRC. HMRC records did not show these individuals to have utilised a scheme while services were provided to the department…In October 2020, further analysis of these individuals using “updated compliance” information was provided. This further analysis showed that in two cases, the usage of a DR scheme was concurrent with the provision of services to HMRC.’
The MPs on the loan charge group is calling for an investigation into this, including looking at whether the Civil Service Code may have been broken.
Even following the introduction of the Loan Charge legislation in 2016, HMRC continued to take on contractors who were using DR schemes, and remarkably this continued right up through to 2020, the APPG said.
HMRC claim that they have always been clear’ that the schemes subject to the Loan Charge were unacceptable and ‘did not work’. They have also claimed that they communicated this view effectively, the APPG report stated.
Calls for investigation
‘We believe that there needs to be a full investigation into the matter, not conducted by HMRC or the Treasury. Senior officers within HMRC must provide a full and honest account of their actions in relation to these disclosures, the information exposed via the FOI responses and the way in which HMRC have responded to inquiries from MPs and Parliamentary Select Committees. This investigation should include looking to see if any HMRC officials have breached the Civil Service Code,’ the report concluded.
The MPs have also written to HMRC head Jim Harra calling for an investigation. The letter also stated: ‘So HMRC, presumably including senior officials, have been involved in a decision to fail to inform a Parliamentary Select Committee regarding an important matter the Committee had asked about, for the clear reason that the sharing of this information was “sensitive” and embarrassing to HMRC.’