HMRC expert quits after tax avoidance scandal

David Heaton has resigned from his post as an HM Revenue and Customs (HMRC) tax adviser after appearing on the BBC’s Panorama TV programme Tax, Lies and Videotape – part of a joint effort with Private Eye.

In the documentary, aired on September the 16th, Mr. Heaton is seen expounding the advantages of careful and perhaps unscrupulous tax planning.

He told the assembled audience that by following his measures they could keep their money from the “grubby mitts” of Chancellor George Osborne.

The comments took place at the 101 Ideas for Personal Tax Planning conference in London, where he was a guest speaker. The conference occurred two months prior to Mr. Heaton’s role within HMRC, where he was part of a panel advising the governmental body on tackling those who practice artificial and aggressive tax avoidance.

Members of the conference had paid £1,000 to attend and listen to experts talk on finance topics including business property relief, morality in tax planning, offshore trusts, and gifting an interest in let property.

The ideas in detail

Mr. Heaton’s talk included a maternity scheme he named ‘the Bump Plan’ – which detailed how a person on maternity leave could deliberately time their bonuses to create an increased rebate on their pay – with the tax paid effectively falling from 41.8% to a measly 8.4%, the BBC said.

On this, he stated: “90% of what you pay out ends up with the employee. You can’t really knock that one.”

Yet evidentially it seems people can, and are, as even though Mr. Heaton initial denied wrongdoing he announced his resignation from HMRC last Friday.

Heaton’s future

Whilst Mr. Heaton’s future is uncertain, it is reported Mr. Osborne was told about the remarks before flying to Lithuania for a meeting with European finance ministers.

It has been said the Chancellor was “very annoyed” with the news of Mr. Heaton’s comments, and instructed “tough action be taken.”

A Treasury Minister has noted Heaton was “directly at odds” with the Government’s position on tax.

The wider picture

The news comes only a month after HMRC published its annual list of the most-wanted fraudsters and tax evaders and the government’s pledge to do more work to catch tax such individuals.

Mr. Osborne has repeatedly shown he is prepared to take a tough stance on the issue, recently stating: “Millions of hard-working people pay their taxes and it is they who are being defrauded. The government has stepped up HMRC’s enforcement activities to enable them to pursue tax cheats relentlessly around the world.”