HMRC reforms turning regulators into 'regulatees', research shows

Reforms to Her Majesty's Revenue and Customs were producing a glut of 'gamekeeper-turned-poacher' tax experts, research from the Warwick Business School and the University of Birmingham suggested on Wednesday.

The research, by Graham Currie and Kevin Morrell at WBS and Penelope Tuck of Birmingham, looked at the reforms at HMRC between 2003 and 2012.

It found that, while some professionals in the sector resisted change and others embraced it, others opted for a third response - leaving the national tax agency for opportunities in the private sector.

The study also found that, with the knowledge gained from inside HMRC, those people were ideally placed to exploit the reforms to help companies avoid tax.

"Where professionals cross the line from being a regulator to becoming a 'regulatee', this could create problems", said Professor Currie.

Professor Morrell argued that the shift to hybrid managerial roles - positions that combine the technical skills with the managing of staff - was a way to address the failure of implementing reform as front-line workers were co-opted into the hybrid roles.

"In essence, the response of hybrid managers towards a policy drive for greater customer orientation is an important determination of policy reform", said Morrell.

"There has been a change in emphasis for tax inspectors from 2003 to 2012. It is no longer a purely technical role inspecting accounts, but now encompasses a client discourse that challenges a public service ethic in which professionals exhibit independence", he added.

The research involved analysing HMRC policy documents and reports from 2003 to 2012, and conducting 43 interviews with senior tax inspectors and their corporate counterparts - many of whom were these gamekeepers-turned-poachers.

It argued that effective governance of the new hybrid managerial roles at HMRC would require an understanding of the labour market, to temper the excess influence by the hybrid managers who left to work in the private sector.

"Otherwise, in settings where it is easy for individuals to move from regulator to regulatee, the pace and consequence of reform will be harder to govern", said Morrell.