Ms Lin Homer
Chief Executive and Permanent Secretary
HM Revenue and Customs
100 Parliament Street
17 February 2012
Dear Ms Homer,
THE SUN NEWSPAPER AND CASH PAYMENTS TO PUBLIC OFFICIALS
I am writing to ask you to investigate allegations that News International, and their subsidiary companies, reportedly made payments to public officials that have been undeclared to the Revenue for tax purposes. As you may be aware, ten current and former senior staff at The Sun were recently arrested in connection with making, or receiving, such corrupt payments as part of Operation Elveden by Scotland Yard.
A widely reported source from the Managements and Standards Committee of the company briefed the press on 15 February 2012 that public officials were receiving regular payments from the company, and were effectively on retainers. My own confidential source, who has knowledge of company payments, has told me that these cash in hand transactions amounted to at least a seven figure sum, and were deliberately made without deduction of tax and National Insurance contributions.
I am also informed public officials who were in receipt of cash payments, some of which are reported to run into tens of thousands of pounds, failed to declare this on their Self Assessment tax returns. The company failed to take appropriate measures to ensure the recipients were paying tax. I am told by my confidential source that there is a great deal of anxiety at the company because of this.
In addition, it is my understanding that The Sun should have kept an accurate cash book to summarise their record of income and expenditure by any method. Again, I would ask you to investigate whether a true record of cash payments was kept by the company, and whether any records have been destroyed. I am very concerned that this may not have happened, which would again amount to a serious criminal offence.
To illustrate the problem, I have seen copies of remittance slips from 2005 to a regularly used private investigator by News International, Jonathan Rees. They indicate that Mr Rees was paid as a “contributor”, suggesting, to a cursory glance from an auditor, that he was providing occasional articles for the paper. In fact, he was being regularly used to conduct covert surveillance and other surreptitious acts. The insider went on to describe this tax arrangement to me as “murky”.
Although I appreciate there are currently three ongoing police investigations into criminal wrongdoing at News International, I think it is imperative that reassurance is given from HM Revenue and Customs that these important issues are being investigated in cooperation with the Metropolitan Police. I am sure you will agree that no company, or individual, should be allowed to get away with what amounts to possible tax fraud by paying too little tax and acting in a dishonest manner.
Thank you in advance for your assistance. I look forward to hearing from you.
Member of Parliament for West Bromwich East