Former UK tax chief who 'lied to MPs' to advise HSBC bank about honesty

Dave Hartnett, former head of HMRC, will work for the bank as an adviser

Retired last July after alleged involvement in 'sweetheart deals' with Goldman Sachs and Vodafone

Sensitive appointment had to be rubber-stamped by Prime Minister

Move comes after HSBC was fined £1.2billion for 'turning a blind eye' to large-scale money laundering by drug cartels, terrorists and rogue regimes

Sensitive: The controversial appointment had to be rubber-stamped by the Prime Minister David Cameron

Britain's top taxman – who stepped down after he was accused by MPs of lying – has been hired by HSBC to advise it on honesty, it emerged last night.
In an explosive move, the bank has appointed Dave Hartnett, the former head of HM Revenue and Customs, as an adviser to ‘enforce the highest standards’ at the firm.
The decision to recruit the 61-year-old, who retired last July, was so sensitive that the Prime Minister had to rubber-stamp the former civil servant’s new job.
Mr Hartnett has pledged not to advise the bank on its tax affairs although he has permission to lobby the Government on behalf of his new employer after a two-year cooling-off period.
The move triggered fury because Mr Hartnett was embroiled in a series of ‘sweetheart deals’ with firms such as Goldman Sachs which allowed them to slash their tax bills by millions.
Last night, it emerged that he also had dealings with HSBC during his time at HMRC.
In documents seen by the Daily Mail, David Cameron was advised that ‘while working in government Mr Hartnett had official dealings with HSBC over a number of years’.
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Deal: The banking giant last month agreed a £1.2 billion settlement in the US over accusations it had allowed drug cartels and rogue states to launder money

While there are no suggestions of wrongdoing, Murray Worthy, from tax avoidance campaigners UK Uncut, said: ‘I think it is absolutely no surprise for someone who spent so many years cosying up to big business that he has now found himself a very lucrative job at a firm that has itself been embroiled with many cases of tax avoidance.’

MPs on the influential public administration committee repeatedly accused Mr Hartnett of lying over a £10million settlement with Goldman Sachs as well as being ‘cavalier’ with taxpayers’ money.
Described as Britain’s most ‘wined and dined’ civil servant, Mr Hartnett also sparked controversy over a total of 107 meals he enjoyed with corporate giants over a three-year period.

Spoof: A protest group entered a dinner at which Mr Hartnett was speaking last year and attempted to present him a spoof award, called the Golden Handshake

The protest group The Intruders presented the award at New College, Oxford

One of these included a ‘sandwich lunch’ with executives at HSBC which took place in February 2010.
But the Prime Minister was told that the contacts Mr Hartnett had with HSBC ‘were no more significant than the contacts he had with other banks operating in the UK’.

LAWSON: BANK ADVISERS WORSE THAN PROSTITUTES

Pay consultants who advise banks on their salary packages make prostitutes look ‘respectable’,  a former Chancellor of the Exchequer said yesterday.

Tory peer Lord Lawson gave his forthright opinion as MPs took evidence on standards in the banking industry.
He said: ‘In my experience, they [pay consultants] are a profession which makes prostitution seem thoroughly respectable.’

And Lord Lawson refused to back down even when a witness giving evidence to him took exception to the characterisation.

Carol Arrowsmith, a pay consultant with Deloitte, said it was ‘difficult’ to accept the suggestion her profession was worse than prostitution.
Lord Lawson replied: ‘It may be difficult but it may be true.’

Mr Hartnett is one of five independent advisers hired by the bank to enforce what it says will be ‘the highest standards, in particular in relation to combating financial crime’.

HSBC said the committee on which he will serve will have a remit to cover group standards ‘regarding tax transparency’.
A spokesman for the bank said this was more about checking the tax affairs of prospective clients, rather than the bank itself.
HSBC refused to disclose how much it will pay Mr Hartnett, who earned a salary of between £160,000 and £165,000 before he left HMRC.
HSBC has been forced to beef up its team combating financial crime after being fined £1.2billion for ‘turning a blind eye’ to large-scale money laundering by drug cartels, terrorists and rogue regimes.
The bank was attacked by American authorities for ‘stunning failures’ last month.
The US Department of Justice accused HSBC of an ‘astonishing record of dysfunction’ in allowing hundreds of millions of illicit dollars through its branches.

In other damning details, it emerged that Mexican drug gangs used the bank so often they built special boxes to fit into the HSBC tellers’ slots.
Washington said at least £550million in proceeds from drug trafficking from Mexican and drug cartels was laundered through HSBC in the US.
It also accused the bank of helping countries evade sanctions with £410million from Sudan, Libya and others sent to HSBC accounts in the US.
Chief executive Stuart Gulliver  said: ‘The new committee, which will benefit from the experience of the expert advisers, will provide invaluable guidance and advice as we strengthen our capabilities and enforce the highest standards.’

At a corporate tax planning conference last year, where Mr Hartnett was giving a speech, eight protesters presented the former HMRC boss with a spoof award.
They presented an award for a 'lifetime's service to corporate tax planning' - called the Golden Handshake - to Mr Hartnett at the lavish dinner at New College, Oxford.
The other guests at the dinner were delighted, giving the news a round of applause.
But it slowly dawned on Mr Hartnett that the prize was a stunt.
The group, known as WeAreTheIntruders, launched into a rendition of 'Oh for he's a jolly good fellow... and so say Goldman Sachs' as they were escorted out.

 

About 1.5million people have not filed their self-assessment tax return with just hours to go before tonight’s deadline, HMRC said.
By last night, about 10.6million Britons, including millions of self-employed workers, should have filed their return for the 2011/12 tax year, or face a £100 penalty.
But HMRC said it had received only 9.1million tax returns.
The fines will escalate dramatically. After three months, they will be charged £10 for each following day. After six months, they are also charged £300 or 5 per cent of the tax that is owed, whichever is higher.