Information Commissioner investigates HMRC over whistleblower enquiry

21 September 2012. Published by Adam Craggs, Partner

An interesting article appeared in the Guardian newspaper (Thursday 7 June 2012) which reignites previous controversies, which we have commented upon, concerning ‘sweetheart deals’...

…that were alleged to have been entered into by HMRC with Goldman Sachs, Vodafone and other large corporates (see our previous blogs of 16 August 2011 and 3 October 2011).

In the Guardian’s article, the paper states that Mr Osita Mba, a solicitor working at HMRC Solicitor’s Office at the time the Goldman Sachs’ deal was entered into, has been the subject of unwelcome and intrusive investigation by HMRC tax investigators who have obtained and used personal information relating to his family. According to the Guardian, telephone numbers and the address of Mr Mba and his wife were passed on to the Criminal Investigations Unit of HMRC with a view to investigation by that unit. This action followed a letter written by Mr Mba to the House of Commons Treasury Select Committee giving details of the deal between HMRC and Goldman Sachs.

Action by the Information Commissioner

It would appear, from the Guardian’s article, that the Information Commissioner has given HMRC 28 days to explain how its Criminal Investigations Unit obtained the numbers and why it is not in breach of the Data Protection Act.

The article goes on to state that the disclosure has caused concern amongst MPs who are concerned over the criminal enquiry into Mr Mba which is described as ‘heavy handed and wrong’.

MPs’ comments

The comments of MPs are illuminating. Margaret Hodge, the Chairman of the House of Commons Public Accounts Committee, said:

‘It is most disappointing that HMRC is acting in a way that requires the intervention of the Information Commissioner. It is essential that genuine whistleblowers such as Mba are properly protected and that the new permanent secretary of HMRC should not try to undermine his vital contribution.’


Since the merger of the Inland Revenue with Customs & Excise in 2005, HMRC have energetically tackled the issue of non-compliance by taxpayers and acquired a plethora of new powers with which to slay the twin dragons of tax avoidance and tax evasion and to close the ever elusive ‘tax gap’. Their efforts to tackle non-compliance have, however, not been assisted by HM Treasury which has systematically cut staff numbers and reduced HMRC’s budget, leading to an organisation that is, unfortunately, under resourced and suffering from low morale.

Against this background, the Mba case throws into sharp relief a point which many tax practitioners are finding of increasing concern, namely, whether, due to lack of resources or otherwise, HMRC are beginning to exceed the enormous powers which have been vested in them by Parliament. This issue becomes particularly acute given that, in these very difficult economic times, the general media and the judiciary, appear to be hostile towards any form of tax structuring.

It is of course in the public interest that HMRC pursue tax that is lawfully due. But to achieve this important end, it is imperative that HMRC, as a public body, use their powers in an appropriate manner. It is very much not in the public interest for HMRC to abuse their powers.

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