HMRC's new chief exec Jon Thompson will report to Edward Troup, Treasury confirms

Treasury perm sec Nick Macpherson says incoming HMRC chief exec Thompson will focus on "spending the money", while executive chair Edward Troup will oversee "strategic, policy and reputational leadership" of the tax authority

By matt.foster

29 Feb 2016

The Treasury has sought to clarify how the new dual leadership structure at HM Revenue and Customs will work out in practice, after last week's announcement that Jon Thompson is to succeed Dame Lin Homer as the tax authority's chief executive.

Thompson, currently permanent secretary at the Ministry of Defence, will shortly take up post as HMRC chief exec, while Edward Troup – currently responsible for signing off HMRC's biggest settlements as tax assurance commissioner – will take on the new role of executive chair.

Speaking to MPs on the public accounts committee on Monday, Treasury perm sec Sir Nick Macpherson confirmed that Thompson would report to Troup, with the new chief exec focusing on the day-to-day running of the department and Troup focusing on tax policy.

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"Jon is going to be responsible for HMRC's operations, transforming the organisation – in effect, he's going to be spending the money," said Macpherson.

"Edward Troup as executive chairman is very much going to be concerned with the strategic, policy and reputational leadership of HMRC and in that role is not going to be spending a huge amount of money."

Macpherson said there while there was no "perfect" way to organise the top of HMRC, there were "precedents for this sort of arrangement", with former HMRC chief Dame Leslie Strathie having previously reported to the department's then-chairman, Mick Clasper. 

But Macpherson said he would expect Troup to "move to a more non-executive role" as time went on, adding: "I wouldn't expect him to be working five days a week in this role indefinitely."

Troup's current job of tax assurance commissioner was created in 2012, in a bid to strengthen HMRC's governance arrangements following a public outcry over the way the organisation handled large settlements. He acts as the final point of approval for the biggest settlements and publishes an annual report setting out how HMRC resolves tax disputes.

Last week's statement from HMRC made it clear that the tax authority's arrangements for assuring large settlements will face an overhaul as Troup steps up to the new role.

PAC chair Meg Hillier – whose committee has recently been sharply critical of the £130m, ten-year corporation tax settlement HMRC reached with search giant Google – pressed Macpherson during Monday's hearing for detail on how accountability for large tax settlements would now fall.

While Macpherson would not be drawn on the precise new structure he had in mind on tax assurance, he told the committee of MPs that they would be "highly entitled, and I would fully expect you, to summon Edward here to explain what he's up to".

He added: "Because of Edward's appointment there are now issues about how the role of the tax assurance commissioner will work. And we're going to be announcing the way forward on that in the reasonably near future, the better for you to understand precisely the decision-making processes."

Asked whether the latest shake-up meant overall responsibility for the settlements reached by the tax authority would now be a matter for Troup, rather than Thompson, Macpherson replied: "As I say, we're going to come forward with proposals on the tax assurance commissioner and no doubt what this committee has said over the years will inform decisions on that front.

"I mean the reality is that both Jon and Edward are commissioners. And if you look at the act it doesn't actually distinguish between commissioners when it comes to collecting and managing taxes. All the commissioners are charged with that responsibility. But equally we need to satisfy that sensible arrangements are in place."

Hillier said PAC would want an "early hearing" with the new HMRC leaders "to work out how they manage their accountabilities and responsibilities between them".

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