HM Revenue and Customs chief executive Sir Jon Thompson has announced he is to leave the tax authority later this year to head up the Financial Reporting Council.
Thompson, who has been the permanent secretary at HMRC since April 2016 and before that spent more than three years as perm sec at the Ministry of Defence, said it had been “a tremendous privilege to lead HMRC for more than three years, so to leave now has not been an easy decision for me to make”.
“I’m immensely proud to have led HMRC as we delivered year-on-year increases in the collection of revenues due for public services; prepared for Brexit and the challenges it will bring; and oversaw a recovery in customer service levels making dealing with their tax affairs easier for everyone,” he said.
“However, to have the opportunity to lead the Financial Reporting Council, as it turns into the Audit, Governance and Reporting Authority, and to promote public trust in doing business in the UK, at a point when we’re about to forge new alliances across the world, is too exciting to turn down.” The Audit, Reporting and Governance Authority will replace the Financial Reporting Council with beefed-up powers as the watchdog for audit and accounting firms, and Thompson will move in the autumn.
His time at HMRC seen the body undertake a series of major reforms, including a wide-ranging programme to shut around 170 regional offices and replace them with 13 regional hubs, as well as plans to digitise tax collection, while also facing an increased workload due to Brexit.
A total 250 programmes of organisational change were under way across HMRC before Brexit, but there were reprioritised after Thompson said it was “not credible” to continue with all the planned changes while also developing plans for border and customs arrangements when the UK leaves the EU. As a result, HMRC delayed or paused 39 IT projects and other reforms, with elements of the flagship Making Tax Digital scheme among the areas to be stopped.
Thompson revealed last year that he had faced death threats after setting out the costs of alternative customs arrangements after Brexit. In evidence to the Treasury select committee in May that the ‘maximum facilitation’ proposal – the preferred solution of some Brexit supporters to use technology to solve customs issues – would cost firms up to £20bn a year had led to “very significant personal consequences” including two death threats.
“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,” he said.
He insisted that it was incumbent on him as a civil servant to act with integrity and give ministers the best advice. “Civil servants do that and we’re really rather good at it, but in the end it’s a democracy. You give a minister your best advice – 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.”
However, his time at HMRC also saw a report reveal workplace abuse faced by some civil servants in the organisation, which led to Thompson announcing a full review of HMRC’s workplace policies and standards.
“We are committed to addressing these issues and is building a comprehensive action plan to support this work,” he said in February.
“The report found that most people in HMRC have dedication, pride and commitment in the work they do and come to work every day to do a good job, serve customers and support their colleagues. And they expect and deserve to work in a safe, tolerant and supportive environment.”
Cabinet secretary and head of the civil service Sir Mark Sedwill praised to Thompson’s work at HMRC.
“I am grateful for the enormous contribution Sir Jonathan has made during his time at HMRC,” he said. “Jon has shown himself to be an exceptional leader as the chief executive and first permanent secretary at HM Revenue and Customs, as well as head of the government’s operational delivery profession. During his tenure, we’ve seen year-on-year increases in the revenue collected, which critically goes into funding our public services.
“Particular credit goes to Jon’s work to diversify the workforce: appointing a diverse and gender balanced executive committee, and opening HMRC’s first regional centre, with two more due this year. I wish Jon all the best in his new role, and I am sure he will be an invaluable asset to the new Audit, Reporting and Governance Authority.”
Thompson initially joined central government in 2004 as on from being Finance Director of Ofsted from where he was named the director general of corporate services at the-then Department of Children, Schools and Families, before moving to be finance DG in the Ministry of Defence in 2009. He then became MoD perm sec in 2012, before taking up the HMRC post in 2016.
In his time in Whitehall, Thompson has had two spells as head of cross-government professions. He was head of the government finance profession for three years until April 2011, and then was named head of the operation delivery profession, government’s biggest professional grouping, in February last year.
“You’re learning the job to some degree”
In an interview with CSW last March, he reflected on his time at the head of two departments.
“When you become a permanent secretary, you’re learning the job to some degree,” Thompson, a former accounting apprentice, observed. “You try things and some things work and some things don’t work, and one of the things you get to do second time around is to take the things that have worked in your previous organisation and bring them to your second organisation, and try to lose the ones that didn’t quite work.
“So I did learn from what we had done in defence – I think after nearly four years in that job that I had a pretty decent grip on what it was like to be a permanent secretary.”
The main lesson Thompson said at the time that he brought to HMRC was “trying to get people more involved in some of the big changes”. One example of this in HMRC has been staff involvement in redesigning a controversial performance-management system.
“Rather than the executive committee sitting round and deciding on the future of performance management, we had a big conversation about it and more than 30,000 people have given us their views, and we had some pilots and some experiments,” he said.
This was also evident in the work to define the vision for HMRC, he said.
“We had a conversation with 60,000 people who then voted for four values and eight principles. It is a different way of involving people in the future of our organisation and the future of their organisation. It is just a great thing to do to go and travel and listen and learn, because I constantly need to learn about the organisation too.”