Less than a year ago he was Britain’s top tax official. Now Dave Hartnett is an adviser to Deloitte, a leading accountancy firm involved in the controversy over corporate tax avoidance.
The former HMRC boss has been appointed as an adviser to Deloitte, whose clients include Vodafone and Starbucks – two of the major corporations who have been accused of avoiding paying their full tax bill in the UK.
Mr Hartnett will work one day a week for the accounting firm, advising foreign governments on how to implement “effective tax regimes”. His appointment was approved by David Cameron, subject to a range of conditions.
He will not be allowed to lobby the government for 12 months, and cannot advise any company which he was involved with during his time at HMRC. Any discussions with other fiscal authorities about confidential UK tax policy are also forbidden.
A spokesman for Deloitte said Mr Hartnett would advise foreign governments on how to “close the tax gap”, and regain revenues which were lost on the black economy.
Mr Hartnett, who spent his entire career at HMRC until his retirement, was roundly criticised by MPs over his “unduly cosy” relationship with big business during his time at the tax department, including Vodafone and Goldman Sachs.
In December 2011, a report by the public accounts committee expressed concern over a deal allowing Goldman Sachs to skip paying a multi-million pound interest bill on unpaid tax dating back to the 1990s.
Mr Hartnett apologised several times, calling it a “mistake”, and insisted there had been no deal. MPs repeatedly accused him of lying, which he denied.
Last week the high court ruled on the matter, and said that although there was nothing illegal, the arrangement was “not a glorious episode in the history of the revenue”.
An email sent by Mr Hartnett at the time warned that Goldman Sachs had gone “off the deep end” at the prospect that the £20bn settlement might not go through, threatening to withdraw from a new code of conduct for banks drawn up by the chancellor, George Osborne.
Mr Hartnett said that could cause “major political embarassment” to the chancellor and HMRC, something he was anxious to avoid. Mr Justice Nichol said Mr Hartnett had been wrong to take that into account.
The former HMRC boss has also just been appointed as an adviser to leading bank HSBC, as part of a committee on financial risks and crime. The bank has just been fined £1.3bn in the United States in connection with a Mexican money-laundering scandal.
The country’s major accounting firms – Deloitte, KPMG, PricewaterhouseCooper and Ernst & Young – have all been accused of using knowledge gained from Treasury staff on secondment to help big corporations avoid UK taxes.
However there are strict rules which will prevent Dave Hartnett from drawing on any “privileged information” which he may have had access to during his time at HMRC.
The campaign group UK Uncut said he had been “welcomed with open arms by the people he was supposed to have been regulating”. They have staged several protests against Mr Hartnett, including crashing a dinner at New College, Oxford, where he was due to speak.
Several protesters, dressed in black tie, walked into the dinner and presented him with a “golden handshake” trophy, before thanking him on behalf of Vodafone and other companies for “saving us millions”. They were thrown out by other diners at the event – one branding them “trespassing scum”.
Deloitte said Mr Hartnett’s new role with them would focus on the developing world. “He has significant experience in advising such countries on the development of effective tax regimes, neccessary to esnsure their continued economic growth,” a spokesman said.
“He will not work with UK companies or with HMRC,” the firm insisted, adding that he would not be advising any private sector clients, and there were no plans for that role to change in future.