This week, a Revenue whistleblower told me Hartnett’s tenure as the country’s top taxman is ripe for an investigation over a series of scandals that have seen giant firms such as Vodafone and GlaxoSmithKline let off paying billions in tax during a series of ‘sweetheart deals’ brokered personally by Hartnett.
The most notorious case came when it emerged in 2010 that Vodafone owed the Exchequer £6 billion in unpaid taxes. Hartnett, after a series of private meetings and with no legal representation, agreed to accept a massively reduced £1.25 billion payment — and allowed the money to be paid back in instalments over several years.
Vodafone never did owe £6 billion. It’s quite simply untrue.
The question was, did the UK’s controlled foreign company rules apply to an EU subsidiary? The answer, no. Thus no tax was actually due.
There also wasn’t a “deal”. All agreed that any such profits from an EU subsidiary brought into the UK would be taxable at the normal rates. And that’s what Vodafone did, brought some of the money into the UK and paid tax on it.
It’s absolutely remarkable that this lie persists.