In the cat-and-mouse game between tax collectors and taxpayers, Edward Troup, executive chair of Her Majesty’s Revenue and Customs, is not alone in having played for both sides.
Educated at Oundle school and Oxford University, the 61-year-old former corporate lawyer is now overseeing an official inquiry into any wrongdoing arising from the Panama Papers tax leaks.
Troup turned from poacher to gamekeeper in 2004 when he left Simmons & Simmons to work on corporate tax policy in Gordon Brown’s Treasury, joining HMRC in 2012 as tax assurance commissioner, where his role was to oversee large settlements with big companies, which during his period included Starbucks.
His role as chair starting this month makes him responsible for strategic, policy and reputational matters, according to the Treasury permanent secretary Sir Nicholas Macpherson.
To his critics, Troup embodies what the Labour MP and tax justice campaigner Margaret Hodge calls the “incestuous world” of tax professionals.
He is one of many, (including his predecessor at the helm of HMRC, Dave Hartnett – who went the other way to Deloitte), to pass through the revolving door connecting the government and the industry advising big companies how to reduce their tax bills.
But to admirers, like the cabinet secretary Sir Jeremy Heywood, Troup’s “deep tax expertise” – acquired in part from years at the City law firm Simmons & Simmons advising offshore tax havens and other clients – qualifies him perfectly to lead HMRC through a “phase of change and amid unprecedented public interest in taxation”.
“A rather anonymous-looking person, but incredibly powerful” is how Hodge describes Troup.
It was Hodge who clashed with Troup in select committee hearings when he was in charge of large tax settlements at HMRC. In one 2013 cross-examination at the public accounts committee, she wanted to know why he wrote in the Financial Times in 1999 that “taxation is legalised extortion”.
At that time he was leading City lawyers’ opposition to Brown’s proposal for a general rule against tax avoidance, which he warned would give the Inland Revenue too much power and leave taxpayers with inadequate protection. It took a few goes before Hodge got him to reluctantly admit he had compared tax to extortion.
“The fact that he had written that draws into question whether or not he should be in charge of our tax system,” Hodge said on Monday.
His point, perhaps clumsily put, had been that an over-complicated system helped avoiders and simpler rules were the answer rather than giving the taxman increased powers to tackle generalised tax avoidance. The phrasing was characteristic of an official who is said not to be focused on how HMRC’s actions play in the court of public opinion.
Troup looks unlikely to lead any earth-shaking reforms at HMRC, according to one leading tax lawyer who knows him. “If you think the world needs to be changed you don’t appoint Edward Troup to that job,” said Jolyon Maugham QC, an expert in taxation law.
Maugham described Troup as “a civil servant’s civil servant - very bright, very sophisticated and extremely pleasant”. But he said he is unlikely to agree that there should be greater transparency in HMRC’s arrangements with big corporations.
“I wouldn’t expect him to see the benefits for public confidence in HMRC in taking test cases against the likes of Google,” Maugham said. “He will play it very much by the book.”
Kenneth Clarke, the former Tory chancellor who recruited Troup as an adviser in the Treasury in 1995, said he had “a great ability and feel for tax that rivalled anyone in the Treasury”.
“He could give the practical reactions,” said Clark, who has stayed friends with Troup. “He knew what the unintended consequences of tax changes would be. He was a very good poacher turned gamekeeper. He had professional expertise and flair. It doesn’t surprise me that he has risen to such a senior rank in the civil service because he is outstandingly able.”
• This article was amended on 12 April 2016. An earlier version referred to the public affairs committee; that has been corrected to public accounts committee.
