Tax Notes logo

Click here to see operators for terms and connectors searching.

HMRC Chief Faced Death Threats Over Brexit Cost Figures

POSTED ON Oct. 12, 2018

HM Revenue & Customs stands by its estimate that a post-Brexit customs arrangement favored by Euroskeptics could cost business up to £20 billion annually, but its CEO has paid a personal price as a result.

Speaking at the Institute for Government October 11, Jon Thompson revealed that after he testified in May before the House of Commons Treasury Committee about the cost of a proposal for a “highly streamlined customs arrangement,” otherwise known as “maximum facilitation,” he started receiving death threats.

“The personal consequence for me has been very, very significant,” Thompson said. “We have had to literally change how I travel and what my personal security is. We have had two death threats investigated by the Metropolitan Police for speaking truth unto power about Brexit.”

The maximum facilitation arrangement was a hard-border solution, which would have relied on technology to minimize post-Brexit customs checks. The proposal, which Brexit supporters wanted, has since been dismissed in favor of a “facilitated customs arrangement,” which would eliminate the need for customs checks and controls between the United Kingdom and the EU as if they were a combined customs territory. 

Civil servants, however, must give ministers the best advice, even if it’s at odds with what they want to hear, according to Thompson. “They may not agree, but in the end, it is a democracy; and when they make government policy, you have to go implement that as best you can,” he said.

HMRC and other areas of the U.K. civil service are wading into new territory brought on by Brexit. “It’s an extraordinary period in our careers; I don’t know if any of us will ever experience anything like this again,” Thompson said.

Aside from Brexit, HMRC has certainly seen major changes, according to Thompson. He noted that in 2015, HMRC succeeded in securing £1.8 billion from HM Treasury to transform the tax system, to be spent over four years. In the last three years, HMRC has learned much about what works and what doesn’t, he said.

New digital services for taxpayers have seen widespread adoption, particularly the personal tax account, which launched in late spring 2016, Thompson said, adding that HMRC had received its 17 millionth registered personal tax account in the United Kingdom.

“Now, working with us digitally is much more popular than actually working in an analog dimension — phone calls are down by 17 percent, the number of forms that were issued in 2015 . . . was 330 million,” Thompson said. “This year it will be down to 30 million, and obviously, we’re aspiring to get that down to zero. That is a dramatic decrease in the old analog ways of working.”

Delivering those kinds of changes has required a team approach, from considering policy changes to making adjustments to projects, and communicating those changes to taxpayers to not only encourage behavioral change but also to elicit input, according to Thompson.

“To deliver what we’ve achieved so far has required leaders to appreciate each other, and the skills and the contribution that they can make, and we have some fantastic and impressive results so far — more tax revenue received, higher overall trust in HMRC as an institution, and lower running costs,” he said. Already, HM Treasury’s £1.8 billion investment has yielded £1.1 billion annually, according to Thompson.

In recent years, HMRC has had to correct course on policies, continue testing some digital tools that may have been introduced too hastily, and explain tax administration changes to taxpayers, he said. Thompson also noted that HMRC has a taxpayer satisfaction rate of about 83 percent, but also receives feedback regarding dissatisfaction.

“We are fundamentally trying to change the way the tax system works and how customers interact with us, but we have to also recognize that there are lessons to be learned,” Thompson said.