HMRC chief Thompson quits in move to head audit regulator

Sir Jon Thompson is to leave the top post at HMRC after just three years to take on the role of chief executive at the troubled audit regulator, Financial Reporting Council (FRC)

Thompson will be in charge of the organisation's transition into a new regulatory body, the Audit, Reporting and Governance Authority (ARGA), which will be given statutory regulatory powers, following heavy criticism of the FRC's abiity to handle audit supervision.

He will join the FRC this autumn and will have to guide the troubled regulator through a major transition programme following the Kingman review, which called for the disbandment of the FRC in its current form and relaunch as the ARGA. 

He will replace outgoing CEO Stephen Haddrill, who resigned last November after nine years at the regulator. At the time of his resignation, Haddrill signalled his intention to stay at the FRC until a successor was appointed, particularly as the chairman role was also open as Sir Win Bischoff had also resigned.

Haddrill’s decision to quit the FRC came after a torrid period in its history, which saw the regulator come under intense pressure to tighten up its oversight activity after a number of audit scandals and harsh criticism from MPs over the Carillion collapse, where the FRC was described as ‘toothless’.

A month after his resignation announcement, the independent review of the FRC led by Sir John Kingman recommended it be replaced with an independent statutory regulator, ARGA, accountable to parliament, with a new mandate, new clarity of mission, new leadership and new powers. 

As a senior career civil servant, Thompson has spent three years as permanent secretary and chief executive at HMRC, having replaced Lin Homer after she quit in April 2016. He joined the tax authority when it was in the middle of a major structural reorganisation with office closures and staff cuts, as well as the introduction of Making Tax Digital, although the MTD rollout was delayed for a year and has been watered down, with only VAT reporting currently operational.

He has also worked at the Ministry of Defence and Department for Education in finance positions. Immediately before heading up HMRC, Thompson was MOD permanent secretary and the government’s principal civilian adviser on defence, with primary responsibility for policy, finance and planning. Prior to this he was head of the government finance profession at the Treasury for three years until April 2011, leading the finance and accountancy community across government.

He qualified with CIFPA, the public sector accounting body, and has also spent time working for Big Four firm EY. Prior to joining the civil service in 2004, he was Ofsted’s first finance director following a mixed public/private sector career working for Norfolk County Council, Eagle Star and then EY where he managed public services consultancy and audit services for the south west.

Thompson said: ‘It’s 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.

‘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.’

During his time at HMRC the department reported a general downward trend in the tax gap, as well as an improvement in customer service levels, which had been the subject of considerable criticism under his predecessor Homer. He also oversaw a major reorganisation, with HMRC considerably reducing its number of offices to focus on regional hubs, with the first opening earlier this year and two more due.

However, while Thompson was at the helm for the introduction of HMRC’s flagship project Making Tax Digital, he is leaving before mandated service for digital record keeping and for filing VAT returns online is fully implemented, with rollout to wider business taxes delayed due to Brexit.

HMRC has said the recruitment process for a new CEO will begin shortly and an announcement about a successor will be made in due course. Jim Harra, deputy chief executive, continues to be the department’s lead for exiting the EU, as has been the case since he took over this role in January 2018 after running the business directorate at HMRC. 

Thompson said: ‘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.’

Report by Pat Sweet, Sara White | 19-07-2019

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