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The National Audit Office (NAO) has published the findings of its investigation into five 'large tax disputes'.  The report is broadly supportive of HM Revenue & Customs (HMRC) in relation to the 'deals' although it did express reservations about some issues of conduct and found 'significant errors' in following procedures.

In terms of the quantum of settlements - whose precise details have not been revealed in the report or elsewhere so as to protect taxpayer confidentiality - the NAO found that the results achieved by HMRC were 'reasonable' - and at least one outcome was 'better than reasonable'. The NAO clearly appreciated that the complexity of some tax cases meant that it was impossible to predict with certainty that HMRC would be successful in court and that it was therefore broadly reasonable to settle on a sum by way of negotiation.

However, it also noted that procedures were not always correctly followed, and that there were some fairly basic omissions, such as failing to take notes of meetings or to consult as to whether or not interest was correctly chargeable. (OK, so maybe one of the taxpayers could be identified...)

Although Mr David Hartnett. Permanent Secretary for Tax, might well also feel vindicated on a personal level, for HMRC the outcome is perhaps a little more bittersweet; one entry in the full report at 2.36 is arguably particularly telling:

"...Sir Andrew Park noted that involving the Permanent Secretary for Tax in the high-level meeting was appropriate, given the magnitude and complexity of the issues involved. At the time, the other commissioners lacked detailed tax expertise, so there was no one else who could have represented the Department at this level..."

Taxpayers should feel reassured that steps have now been taken to more than double the number of individuals with appropriate levels of tax knowledge, with the appointment of two more Commissioners who have tax expertise. And there is also to be an independent Assurance Commissioner, who will review those tax cases with the largest amounts at stake.

Mr Hartnett is of course due to retire shortly.

The NAO's findings are published at Settling Large Tax Disputes