Tax - Mobile man to head merged tax authority

The government has revealed that its new super tax department - a merger of Customs and the Inland Revenue, as announced in the March 2004 Budget - is to be known as Her Majesty's Revenue and Customs.

Its first executive chairman will be David Varney, the outgoing chairman of telecoms company mm02 plc and chairman of Business in the Community.

Varney will take over on 1 September from acting Revenue chairman Ann Chant, who took the helm on Sir Nick Montagu's retirement in March, and acting Customs chairman Michael Eland, who succeeded Richard Broadbent in August last year.

The new tax chief will be supported by new deputy chairman Paul Gray, who is currently second permanent secretary in charge of pensions and disability at the Department for Work and Pensions.

Varney, 58, previously spent 28 years with Shell. He was appointed a managing director on the board of Shell UK Ltd in 1991, and a director of Shell International Petroleum Company in 1996. He was named chief executive of BG Group in 1997 and became chairman of mm02 at its foundation in May 2002. He leaves the telecommunications company after its agm in July.

Varney also served as chairman of London's New Deal Employer Coalition, with responsibility for promoting the government's employment New Deal to business and the public from 1998-1999. He was then appointed to the Ministerial Performance Review Panel to monitor the implementation of the New Deal.

He is a member of the president's council of the Confederation of British Industry, and president of the Institute of Employment Studies.

On announcing the appointment, chancellor Gordon Brown said: 'Mr Varney is an outstanding business leader with a first-rate record proven across the private sector with a reputation for good management and effective delivery'.

Gray, 55, began his civil service career at the Treasury in 1969 as a professional economist, and between 1988 and 1990 was economic affairs private secretary to the prime minister.

Later at the Treasury he worked on monetary policy, serving as a member of the EU Monetary Committee, before becoming head of personnel and central services in 1993. He was then director of Budget and public finances between 1995 and 1998, with responsibility for oversight of the Budget process and liaison with the Revenue and Customs. He played a leading role in the planning and implementation of the merger of the DSS and the employment part of the former Department for Education and Employment.

Tax experts predict that it will take up to five years for the two distinct cultures of the Revenue and Customs to integrate fully. The biggest challenge will be to maintain good customer service as the disruption of the integration process takes place.

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