The Changing Role of Tax Governance: Remaking the Large Corporate Taxpayer Into a Visible Customer Partner

bs_bs_banner

British Journal of Management, Vol. 24, S116–S131 (2013) DOI: 10.1111/1467-8551.12031 The Changing Role of Tax Governance: Remaking the Large Corporate Taxpayer into a Visible Customer Partner

Penelope Tuck Birmingham Business School, University of Birmingham, University House, Edgbaston Park Road, Birmingham B15 2TY, UK Email: [email protected]

Neo-liberalism encourages the rule of private interests coordinated by markets and arms’-length regulation by central government and regulatory bodies, and also through the explosion of audit and scrutiny. Part of this approach is the reconceptualization of users of services or functions as customers even though a quasi supplier relationship does not seem to be involved, such as between a regulator and a regulatee. This empowerment of the customer has a consequential impact on the regulation process. This paper theorizes this dynamic of power as recursive governmentality. It examines the change and unintended consequences in a regulatory authority, HM Revenue and Customs, the UK tax administration, as it responds to this policy context and how this leads to a search for a new identity as a customer-service provider.

Introduction In the paper I draw in part upon Foucault’s discussion of governmentality, in particular his The neo-liberal agenda has encouraged public later work on neo-liberal governance (Foucault, administration to focus on the users of services 1979b). Foucault’s work has been extensively rather than the act of providing the service them- drawn on in organization studies (Burrell, selves (Clarke et al., 2007). Part of this change in 1988; Ferlie, McGivern and FitzGerald, 2012; focus has been the reconceptualization of these McKinlay and Starkey, 1998; Townley, 1998), in users as customers (Laing and Hogg, 2002). This marketing (Skalen, 2009) and within the account- is not just conﬁned to more traditional service ing literature (Graham, 2010; McKinlay and user areas, such as health or education, but even Pezet, 2010; Miller and O’Leary, 1987; Miller and to upstream service infrastructure and regulatory Rose, 1990; Neu, 2006; Preston, Chua and Neu, functions. It can also be seen with the emphasis on 1997; Rose, 1999). In addition there are a few internal customers between departments and the studies that speciﬁcally relate to taxation (Bush recent changes in public procurement. This paper and Maltby, 2004; Glaister and Frecknall focuses on one such relationship – the relationship Hughes, 2008; Lamb, 2001; Preston, 1989; between a corporate taxpayer and the UK tax Randall and Procter, 2008), which is surprising as administration, HM Revenue and Customs the corporate taxpayer and the collection of gov- (HMRC). ernment revenues are increasingly important issues for society. Public administration and public management scholarship has focused on Financial support for this research has been provided by the Chartered Accountants’ Trust for Education and the impact of consumerism on the consumer and Research of the Institute of Chartered Accountants in the customer (Clarke et al., 2007; Rosenthal and England and Wales. Peccei, 2007) and the impact on the professionals

© 2013 The Author(s) British Journal of Management © 2013 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, 02148, USA. The Changing Role of Tax Governance S117 administering the reoriented health service provi- disciplinary power. It is especially powerful at sion (Laing and Hogg, 2002). investigating linkages between those who govern The contribution of the paper is threefold. First (or help to govern) and those who are governed it makes connections between two prominent and assists in understanding ‘post bureaucratic’ public management issues that hitherto have been organizations (Ferlie, McGivern and FitzGerald, poorly understood. The first is the audit explosion 2012). This disciplinary power relies on a self- so effectively summarized by Power (1997) that disciplined subject such that ‘governing operates explains the growth of audit and regulation in through subjects’ (Miller and Rose, 1990, p. 18) contemporary public policy. The second is the and which in the process results in discipline or reconstruction of service users as customers government, i.e. an attempt to shape behaviour. (Clarke et al., 2007). Taking both these issues Disciplinary power is the political implementation together, what stands out is how the regulated are of pastoral power2 and is drawn from the ideas increasingly constructed as a customer within articulated by Foucault (1977, 1986). Here there is these new governance frameworks. However, the a particular focus on how disciplinarity is a two- use of the term customer gives the illusion of sided term, which designates both a certain mode empowerment (Sturdy, Grugulis and Willmot, of knowledge (the knowledge ‘disciplines’) and a 2001). This paper looks at this difficulty with the mode of conduct (behavioural discipline, includ- customer basis of control in a different and novel ing self-discipline). This is a nexus of power/ way. knowledge (Ferlie, McGivern and FitzGerald, Second, much of the literature on governmen- 2012). tality in management studies has looked at it from Foucault in his later work argued that the 20th a disciplinary power perspective. Foucault’s later century saw the development of disciplinary work which deals explicitly with the apparatus of power whereby, instead of just focusing on indi- security and neo-liberal governmentality has been viduals as the subject, populations were being largely neglected in business research (Munro, subjected to a further apparatus of power which 2012, p. 350). I seek to address this gap. In par- he called ‘the apparatus of security’. The concept ticular I seek to demonstrate in a contemporary of ‘population’ allowed the government of the setting aspects of neo-liberal governmentality, in state to involve both individualization and totali- particular the centrifugal forces of market, tech- zation (Curtis, 2002). It is similar to the Christian niques for performance measurement, the audit notion of a ‘flock’ where each member of the con- mechanism and normalization of a population gregation is equivalent to another member and, in (Munro, 2012, p. 351). Third this paper contrib- addition, each member is equivalent to the whole utes empirically as research into tax administra- congregation. The ‘apparatus of security’ occurs tion is underdeveloped (Boden et al., 2010). when not to intervene will cost more. For Fou- The paper commences with discussion of the cault ‘discipline concentrates, focuses, encloses’ theoretical framework used before a brief history (Foucault, 1978, p. 45). Discipline is thus a cen- of HMRC and the customer construct. I then tripetal force whereas the apparatus of security examine the impact of the customer construct on expands as a centrifugal force which encompasses the governed, the large corporation,1 before production, psychology, behaviour and the ways looking at the impact on HMRC as a regulator. of doing things of producers, buyers and consum- The paper concludes with a discussion of the ers (Foucault, 1978). This has contributed to dynamic of power and the consequences and the transformation in the relationship between implications of pursuing a customer service knowledge and government and the boundary approach. between state and the economy (Foucault, 1979b). For Foucault, neo-liberalism can be distinguished from liberalism. Whereas liberalism is Governing the taxpayer a mode of regulation to permit natural regulation

The Foucauldian notion of the technology of 2Pastoral power which has its roots in Christianity is government is built upon Foucault’s idea of salvation-oriented, oblative, individualizing, coexistence and continuous with life and linked to the truth of the 1This will include multinational groups of companies. individual (Foucault, 1994, p. 333).

© 2013 The Author(s) British Journal of Management © 2013 British Academy of Management. S118 P. Tuck such as laissez-faire and the market is thought of (Brown and Lewis, 2011; Burchell, Clubb and as being a ‘spontaneous quasi natural reality’, Hopwood, 1985; Bush and Maltby, 2004; neo-liberalism regards the market not as such a Graham, 2010; Hoskin and Macve, 1986, 1988; natural reality but one in which government con- Miller and O’Leary 1987; Miller and Rose, 1990; ducts ‘a policy towards society such that it is pos- Neu, 2006; Preston, 1989; Thornborrow and sible for a market to exist and function’ (Gordon, Brown, 2009) and the ‘panoptican’ to understand 1991, p. 41). Neo-liberal government does not management practices (Munro, 2012). This has ‘define and monitor market freedom, for the examined the knowledge/power nexus and the market is itself the organizing and regulative prin- training of docile bodies that make up the work- ciple underlying the state’ (Lemke, 2001, p. 200). force. Within health research, Ferlie, McGivern The state does not control the market, but the and FitzGerald (2012) investigate the applicabil- market exerts influence on the state. ity of governmentality in the English cancer ser- Neo-liberal governmentality or advanced liber- vices field. They find that evidence based medicine alism has two aspects. First it is to govern is viewed from a power/ knowledge perspective ‘through the regulated and accountable choices such that those with specialist knowledge are in a of autonomous agents’ and second ‘to govern privileged status with the production of guidance through intensifying and acting upon their alle- whereas the ‘rank and file’ and the clinical rank giance to particular communities’ (Miller and are expected to implement the guidance without Rose, 2008, p. 216). According to Miller and Rose having a part in the development of that guidance. (2008, pp. 212–214), there are three characteristics Waring (2007) has examined how patient safety of advanced liberal governmentality: first, ‘a new reforms have impacted medicine regulation. specification of the subject of government’. This Research, in a marketing context, has examined refers to the development of the self-responsible the making of front-line employees into customer- individual or subject with further powers as a oriented employees (Skalen, 2009). In other client or customer of services, such as health, edu- research in social housing, individuals who are cation. The subjects of rule are now enterprising not owner occupiers are tenants who are shaped selves who, rather than being dependent, are able as autonomous agents and given more responsi- to fulfil their national responsibilities by govern- bility to exercise choice in their housing needs ing their own conduct. For instance social work (Flint, 2003). Patients are customers of the health becomes the ‘private counsellor, the self-help market if patients behave according to the defini- manual, the telephone helpline’ (Miller and Rose, tion of the patient/customer that the state has 2008, p. 215). Second, a ‘new relation between decided upon (Clarke et al., 2007). Much of this expertise and politics’: calculative practices have research has looked from the perspective of the been introduced such as accounting, which have consumer, for instance at what has been the taken the place of previous judgements of human impact on the user of the service now defined as a knowledge, and audit and scrutiny techniques consumer. Miller and Rose (2008, p. 200) raise the have developed to critique authority. Third, a question of the impact of pursuing ‘conduct of ‘new pluralization of “social” technologies’: by conduct’ processes on authorities; however, little this Miller and Rose refer to the transfer from the research attention has been directed at addressing centre of government of regulatory technologies this issue. which are replaced with a form of government As Foucault’s work on governmentality con- which shapes the activities of autonomous bodies sists of a small amount of written work and some such as organizations. Although the state might lectures (1978, 1979a, 1979b), there is a large have reduced its direct influence, the rise of regu- amount of secondary literature. This literature latory bodies represents a form of accountability has mainly looked from the perspective of where new calculable spaces are made visible so ‘top-down’ and singular approaches to power that activities within these spaces can be quanti- and has given limited attention to resistance fied and so accounted for (Miller, 1990; Rose, (McKee, 2009). Miller and Rose’s (2008) essay on 1999). advanced liberalism does not deal with resistance. Much of the work on governmentality in the However, for Foucault the aspect of resistance or management and organizational studies literature ‘counter-conduct’ was an important part of defin- has focused on the disciplinary aspect of power ing the subject and inseparable from the analysis

© 2013 The Author(s) British Journal of Management © 2013 British Academy of Management. The Changing Role of Tax Governance S119 of governmentality (Foucault, 1978). By counter- tions successive UK governments from Thatch- conduct he meant ‘in the sense of struggle against er’s in the 1980s have used the consumer/choice the processes implemented for conducting others’ link to assist in reforming public services and the (Foucault, 1978, p. 201). To Foucault, discipli- welfare state irrespective of whether this initially nary power is productive and operated in many is seen as an appropriate term (Ogden, 1997). The directions. For Foucault, resistance illuminated reforms were directed at putting the consumer of power relations, such that resistance is a ‘chemical the services first such that the public services catalyst so as to bring to light power relations, would be user led and not led by the producer or locate their position, find out their point of appli- the bureaucracy (Blair, 2001; quoted in Montagu, cation and the methods used’ (Foucault, 1994, p. 2003). The ‘consumer’ was defined as ‘the non- 329). McKee (2009) has examined the impact on exploitative, non-fraudulent user of public ser- professionals and their resistance, in this case vices who had an interest in service quality, housing, such that tenants become ungovernable responsiveness and “value for money” ’ (Clarke subjects, as they do not wish to actively partici- et al., 2007, p. 30). Other authors have referred to pate in formal schemes that aim to give them more the co-production of services between the service empowerment. provider and the user of the services (Alford, I now introduce the subject of government: the 2002). Within a public sector context, services are customer of HMRC. After detailing the research directed both at citizens and the clients being the methods, I build on Miller and Rose’s three char- beneficiaries and obligates and as part of the acteristics of advanced liberalism (2008, pp. 212– democratic process citizens as a collective decide 214). I extend this literature by focusing in what services are to be provided and for how particular on resistance-‘counter-conduct’ and I much. Miller and Rose (2008, p. 20) have argued address the impact on authorities, in this case that ‘a genealogy of governmentality draws atten- HMRC, by pursuing a ‘conduct of conduct’ tion . . . to the issue of co-production in moving approach (see Miller and Rose, 2008, p. 200). from the public/private division’. In common with other public sector entities where the citizen has been reconstructed as a History of HMRC and the consumer/customer (Clarke et al., 2007), the then customer construct IR introduced the customer concept internally to refer to taxpayers in the early 1990s (interview, IR Until April 2004 there were two national tax gath- official #2, 2003). Following the policies intro- ering bodies in the UK: the Inland Revenue (IR) duced by Next Steps, concerning the setting up of dealing with direct tax including income taxes and distinct executive agencies to carry out service corporate taxes; and HM Customs and Excise delivery (HC 494-I); The Citizens’ Charter (Cm (C&E) dealing with indirect taxes such as VAT. 1599), the objective of which was to make admin- Each of these organizations had different cultures istration citizen friendly; and the issue of the and practices of tax collection (e.g. C&E, see White Paper Competing for Quality (Cm 1730), Randall and Procter, 2008). This was partly due the Board of the IR decided that significant to the different histories of the organizations but change to the structure and processes of the IR also to the different nature of the taxes. VAT, as was needed (NAO, 1996). This resulted in a ten- an indirect tax, is based on turnover (sales) year change programme within the IR starting whereas a direct tax such as Corporation Tax is in 1992 focusing on four important areas known based on taxable profits, i.e. profits adjusted for as the ‘Four Cs’ which emphasized ‘Customer tax. The calculation of profits is subjective as it is service’, ‘Compliance’, ‘Cost efficiency’ and based on a number of judgements and estimates. ‘Caring for staff’ (NAO, 1996, p. 1). The IR and C&E merged in April 2004 to form Clive Corlett (1994), the then deputy chairman HMRC (Cm 6163). of the IR, writing in The Times in 1994 said that The customer relationship-building trend is the IR used the word ‘customer’ for two reasons: visible across the public sector and is a key feature of new public management in practice (Brunsson We use the word ‘customer’ for two reasons. First and Sahlin-Andersson, 2000; Clarke et al., 2007; we hope that it conveys to taxpayers that they have Needham, 2006). In common with other jurisdic- all the rights to courtesy, efficiency and satisfaction

that they expect in all their other business dealings. Modernising Government White Paper in March Second, it reminds all of us in the Revenue that, 1999 (Cm 4310). Marketing techniques were uti- although we may be a monopoly, we have a clear lized when income tax SA was introduced obligation to provide the best possible service to the (Farron, Gowthorpe and Pilkington, 1999) and a public. marketing director of the IR was appointed in November 2000 (Cm 5118, p. 1). In 2005 HMRC The Inland Revenue Customer Services Manual produced a document entitled The Whole Cus- (1999) further notes that the word ‘customer’ is tomer Vision, Practice and Design Principles used because not all of the people that IR deals which set out HMRC’s customer strategy, stating with are taxpayers as the IR makes repayments. that the ‘customer is at the centre of the HMRC Following the merger of the IR and C&E, the strategy’ (HMRC, 2005, p. 4). objective of the customer approach was to enable The introduction of the term ‘customer’ HMRC to understand the priorities for large busi- involved new activities such as a customer seg- ness ‘in order for HMRC to continue to deliver mentation strategy and customer surveys (Tuck, significant measured improvements in the cus- Lamb and Hoskin, 2011). In particular perfor- tomer experience and to contribute to visible mance targets and customer surveys were intro- improvements in tax compliance, productivity duced to measure customer satisfaction (IFF and customer satisfaction by prioritising improve- Research, 2011; Malam et al., 2010). Ogden ments in process, products and channels’ (Malam (1997) notes that customer and customer service et al., 2010, p. 48). concepts get operationalized via quantified meas- As well as the introduction of the customer ures as the means to ascertaining the effectiveness concept, Self Assessment (SA) in common with of providing a service to customers. Public sector other tax jurisdictions was introduced in 1997 for agreements with measurable targets were intro- individuals and in 1999 for companies. Under this duced within the IR and subsequently HMRC arrangement individuals and companies (on a following on from the 1998 White Paper Public separate basis) complete a prescribed format Services for the Future: Modernisation, Reform, return known as a Tax Return which details their Accountability (Cm 4181, Cm 4315) and included direct taxable income and their own calculation of targets directly linked to increases in customer the tax due. There is a fixed time limit for the service (Cm 5706, p. 14). This reflects the demands return to be submitted and for the tax due as from stakeholders for accountability which mani- calculated by the customer to be paid. The fests itself increasingly in the measurement of per- HMRC assume that the information shown on formance and the introduction of targets to the return is correct unless it is found to be oth- regulate the activities of organizations (Power, erwise. Prior to the introduction of SA enquiries 1997). into a tax return commenced by written corre- In addition changes to HMRC’s organizational spondence with recourse to meetings if an impasse structure reflected the customer segmentation in the negotiations occurred. HMRC would then approach including in the UK the then IR setting issue an assessment of the tax due to be paid. In up the Large Business Office on 1 August 1997, addition, with the introduction of SA areas of which dealt with 900 of the largest UK groups of concern had to be disclosed to the HMRC rather companies, including banks, building societies than waiting for the HMRC to raise questions and insurance companies (Cm 4079, p. 23). Under (e.g. transfer pricing issues). The customer subject the previous arrangement companies were dealt is now not dependent on HMRC to calculate how with by the local tax office in the district where the much tax is owed. They can fulfil their tax paying registered office was situated. This was renamed responsibilities by their own conduct without the Large Business Service (LBS) after the relying on HMRC. The customer concept merger.3 In addition, C&E set up the Large Busi- together with SA, in Miller and Rose’s terms ness Group (Randall and Procter, 2008). Thus the (2008), is a ‘new specification of the subject of company taxpayer entity came to be treated as government’ which is one of the characteristics of part of a population. Customers were first dealt advanced liberal governmentality. The customer service and enabling concepts 3For the purpose of this paper, references to either LBO were further emphasized with the issue of the or LBS will be denoted LBS.

with as separate taxpayers. Then subsequently (HM Government, 2010). This impacted on taxpayers were governed both on an individual HMRC to achieve 25% efficiency savings (Gauke, basis and as part of a population to which they 2010) including a reduction of 15% of expenditure belonged, i.e. individuals as a group or large com- (Cm 7942, p. 10) in the 2010 Spending Review panies. The Customer Services Manual notes this period. The UK Government’s Remit Letter to movement away from focusing on an individual Dame Lesley Strathie, the Chief Executive of taxpayer: HMRC, also directed HMRC spending patterns so that HMRC would deliver a lower cost base The fewer people who need to ask for our help on an whilst building on its customer-centric strategy individual basis the better the service we can give (Gauke, 2010). them. Customer segmentation practices have influ- enced the process and techniques of tax collection. Research methods The tax administration’s role is to ensure that the right amount of tax is paid such that the role is The empirical material in this paper includes 35 both a regulatory and an enabling process, i.e. semi-structured interviews carried out in 2001– assisting taxpayers as customers to pay the correct 2005 with elite HMRC (including IR pre-merger) sum. In a regulatory body such as HMRC it is officials who were at Senior Civil Service grade, difficult to separate the enforcement powers of tax UK tax directors and tax managers of multina- collection and techniques of government. Ayers tional companies (including FTSE 100 compa- and Braithwaite (1992) take the view that power nies), and tax partners from one of the Big 4 firms should be exercised by various organizations of accountants in the UK, who are informants including markets and the community in equal involved in the process (Table 1). Access was measure. They argue that the state should redis- negotiated through high level contact at both IR, tribute power by giving power to previously pow- HMRC and the firm of accountants. Within IR, erless organizations such as consumer groups, i.e. interviews were carried out in six of the then 13 empowering citizens. Instead of removing regula- individual offices of the LBS as well as at head tions (deregulation) regulation should be tran- office. The tax directors and managers of multi- scending, in that different degrees of regulation national companies were part of a business should apply to different strata of the regulated discussion group organized by the Big 4 firm but population. who were not necessarily clients of the particular Inspired by Ayers and Braithwaite’s approach firm. The multinational companies were chosen to (1992) the Australian Tax Office tax compliance cover a range of different industries including model was developed (Braithwaite, 2007) which insurance, pharmaceutical, banking, industrial was adopted by HMRC (Cm 5428, p. 11). This and service groups of companies and which had a model stratifies customers into those who comply significant UK tax charge in their financial and those who do not. Securing tax compliance is statements. depicted as a regulatory pyramid. The vast majority of taxpayers are at the base, the non-compliant at the apex. Enforcement procedures increase as Table 1. Summary of interviewees one goes up the pyramid. This model has been Year FTSE tax HMRC Big 4 Reference adapted further by HMRC such that HMRC directors officials firms focused their activities on particular customer 2001 5 A, B, C, D, E groupings (Cm 7774, p. 12) and have introduced 2002 3 Z, Y, X risk management practices. 2002 1 F The election of the UK Coalition Government 2003 2 W, V in May 2010 marked a significant change in the 2003 9 G, H, I, J, K, L, M, N, O 2003 11 #1, #2, #3, #4, #5, #6, #7, funding of public services and departments of #8, #9, #10, #11 central government. The Coalition Agreement 2004 2 #12, #13 made clear that there would be a substantial cut in 2005 2 #14, #15 public expenditure as opposed to raising taxes, the 2010 5 #16, #17, #18, #19, #20 objective being to reduce the structural deficit Total 15 20 5

These informants from within and outside IR goods and services are sold (Clarke et al., 2007, and HMRC include those who have initiated, p. 139). They have a complex relationship directed and led the process; those who have with public services which, Clarke et al. (2007) implemented the process; those who are signifi- argue, is difficult to capture in a simple cant players in the process; and those who have domination/resistance model. They appreciate the ability to alter future processes. Where possi- and ‘understand the dominant discourse and ble all the interviews were recorded and tran- understand how they are spoken for within it’ (p. scribed. For those interviews that were not 154). This is manifested by large corporates recorded, as the interviewee refused permission, understanding the product from the perspective detailed notes were taken and were transcribed of a citizen who wishes to see tax revenues col- immediately after the interview. The interviews lected but not from the perspective of the payer of focused on five main areas: operational practices; those revenues. The payment of tax is regarded as history of the LBS; inspector expertise; relation- just another business activity by large corporates ship with HMRC/large corporates; and risk as- (I, Tax director FTSE 100 company, 2003). sessment. The transcripts were re-read a number Part of this confusion is the difficulty, in Fou- of times. All the interviews were coded using a cauldian problematization terms, of identifying computer software package. This enabled specific the subject in the relationship. The customer themes to be identified. The codes were developed subject can either be the taxpayer, or citizens, or iteratively from the literature review and the data. in fact HM Treasury who could be thought of as When new codes were identified from the data the true customers of HMRC. This was reiterated previous transcripts were revisited so that these by a tax director of a multinational company. codes could be used. Second order coding was I told [a previous director of LBS] quite vociferously carried out to group initial themes into categories. we aren’t customers. In my view the customer of the Evidence was also obtained from publicly avail- Inland Revenue is the Treasury and we are not cus- able documents. In addition a further five inter- tomers we are taxpayers. (K, UK tax director of views were carried out with senior HMRC multinational company, 2003) officials in head office in 2010. The purpose of these later interviews was to examine the impact This resistance could be an example of institu- of pursuing the customer discourse after a period tional change and rhetoric (Brown, Ainworth and of time. Whilst the interviews were conducted Grant, 2012), such that the language of the cus- over a period of ten years, the major part of the tomer is being used but there is no real change. data was collected in the period shortly after a However, in Foucauldian terms this resistance, a speech made by the then Prime Minister in 2001 key component of governmentality, can be seen as focusing on putting the customer first in public a counter-conduct (Foucault, 1978). sector delivery (Montagu, 2003). In some cases there is some appreciation of what HMRC is trying to achieve but the resistance is demonstrated by the view that the cus- Impact on the governed: large tomer discourse is an inappropriate term to businesses and the customer construct describe the change. A tax director of a FTSE 100 company commented: The introduction of the customer concept met I think they’re trying to show that the Inland widespread resistance (Montagu, 2003), including Revenue has had this ogre reputation as some sort among large corporates. A tax director of a large of miserable organization that just drags money out corporate commented: of people and I think they’re trying to demonstrate that their role is essential to society, important to We had a meeting with the Revenue recently and society and they’re doing it the best way that they they talked about their customers and I said ‘Sorry, can do and I understand that and that’s right. But to customers? What are you selling here?’ say I’m their customer? I think that’s the wrong way (I, UK tax director of multinational company, 2003) to go about it. The analogy is when British Rail This resistance is consistent with other public stopped talking about ‘passengers’ and started using sector services in which people, such as patients, the term ‘customers’ and you’re thinking: ‘What was do not see themselves as customers to whom wrong with passengers?’ There’s nothing wrong

with the word, but what they’re trying to do, I The different interpretations of what is meant suppose, is to get a new image of what they’re doing. by ‘customer service’ obviously have significance And I think the Revenue are trying to do that, to to the measurement of customer service such as create this image that these are important things when the monitoring of the PSA target is under- that they’re doing, vital things that they’re doing, taken and this focus on measurement of customer but going the customer route I think is the wrong service has continued to gain greater importance. route. (B, Tax director of FTSE 100 company, 2003) However, perhaps more significantly, the ‘customer service’ term gets more deeply entrenched This illustrates the confused image of HMRC’s within the HMRC discourse, in part because of role to large companies. Large companies have the quantified measurement (cf. Miller, 1990), been in a position of power with HMRC. Unlike such that service management targets become a the majority of individual taxpayers, large corpo- technology of government (Skalen, Fellesson and rates have always had the ability to move parts of Fougere, 2006). One of the recommendations their operations (such as head office and admin- included in the Review of Business Links report istrative functions, manufacturing operations and was that regular independent customer satisfac- research and development) to other countries, tion surveys should be carried out (IR, 2001). The within reason, who may offer favourable condi- practice of measuring customer service had the tions such as business environment, tax conces- effect that customer service took on a more sions, availability of specialized labour (WPP, prominent role in the activities of the HMRC such 2007). Therefore they can effectively choose at that the scope of the reviews became wider (LBO least partially whether to be regulated by the UK Forum minutes, 20 November 2002; LBO Forum tax authorities or some other jurisdiction. minutes, 22 July 2003) and encompassed more Neo-liberal governmentality involves shaping of the LBS’s work. It was further reinforced those who are governed, i.e. ‘conduct of conduct’. with introduction within HMRC’s processes of However, the difficulty, or impediment, is ‘PaceSetter’, a lean implementation technique when those who are governed do not accept or (Radnor and Bucci, 2007). A senior HMRC offi- understand why they are named as such. Whereas cial commented, health service patients can be moulded to the definition of a ‘consumer’ (Clarke et al., 2007), albeit I’m visualizing our performance wall where we’ve with resistance, which is appropriate to the gov- got yield performance, we’ve got customer perfor- erning of health services, those patients/ mance, which is about how the customers perceive consumers/customers understand what service is us, and we’ve got various operational things. (#16, being delivered to them, i.e. health services. It is HMRC finance official, 2010) even more difficult when the customer does not This link between yield and customer perfor- understand what service is being delivered to mance has given customer service a greater visibil- them. ity such that the relationship between expertise The inclusion of the Public Sector Agreements and politics is altered and calculative practices (PSA) customer service target has focused the have replaced judgements and can be made aud- HMRC to measure ‘customer service’ such that a itable (Power, 1997). calculable space has been made visible (Miller, 1990; Rose, 1999). However, the difficulty is that customer service is not a fixed concept and there is Impact on HMRC as a regulator no precise definition of what is meant by this term; it is interpreted by different organizations and dif- One aspect is that the greater visibility of cus- ferent individuals in different ways (Needham, tomer service has increased expectations from the 2006). There is clearly confusion over what is HMRC perspective. One of the primary activities meant by ‘customer service’ amongst large corpo- of the HMRC, as a regulator, is a duty to collect rates themselves. It can be interpreted by a large tax in accordance with legislation. However, corporate tax director as the HMRC being facili- HMRC has a dual role towards taxpayers, ‘an tators to help the corporates to pay the correct enabling as well as a regulating Department’ amount of tax (J, UK tax director of multina- (Montagu, Cm 5118, p. 1), such that HMRC has tional company, 2003). a duty to regulate taxpayers to ensure the correct

© 2013 The Author(s) British Journal of Management © 2013 British Academy of Management. S124 P. Tuck tax legislation is applied and they pay the correct complex or simple, attitude to tax avoidance and amount of tax. At first sight being both a regulat- the accuracy of the tax computation and financial ing and an enabling department seems a confusing statements. The assessment of risk influences the message (Rondeaux, 2006; Skalen, 2004). Cus- amount of resources which are applied to the par- tomer service is part of the enabling message. This ticular company in investigating its tax affairs. increased focus on customer service is not without The introduction of risk based regulation is difficulties as there may be a limit to the ‘enabling typical of neo-liberal governmentality (Black, and regulating’ message. HMRC may be over- 2005). The HMRC Operating Model issued in promoting customer service at the expense of col- April 2006 formalized the sharing of the risk lecting taxes, as observed by an IR official. assessment practice further. This manifested itself such that HMRC acknowledged that it might It’s not recognized that calling taxpayers ‘custom- have to work in partnership with large corporates, ers’ overemphasizes the enabling side of things to as the following quote from the risk management the cost of the regulating. Quite clearly we are here report illustrates: to regulate: we are not paid to enable. I think the enabling is significant but it’s very much a minority Where we believe that a customer is not managing of what we ought to be doing. (#6, IR official, 2003) tax risks adequately, or is repeatedly pushing at the boundary of the law, we will intervene quickly and This statement also indicates some decoupling intensively. We will aim to work in partnership with between HMRC executive policy and tax officials our customers to help them manage and reduce their who are in primary contact with large corporates. [from HMRC’s perspective] tax risks. (HMRC, The enabling message was interpreted by tax offi- 2009, para 1.4) cials as helping the corporate’s tax department in their dealings with other parts of the customers’ Thus the regulation process is one of working in organizations (#8, IR LBS official, 2003) such partnership with those it regulates (HMRC, that a co-production of services is achieved (cf. 2009). This has been manifested in HMRC going Alford, 2002). to assist corporates with identifying risks. The enabling message was developed and And we [HMRC] go along and help them while extended such that as well as helping customers to they’re developing it, put in the controls and checks work around barriers in their organizations a that we need to audit, things like a systems risk more inclusive working basis was proposed overview where somebody’s not looked at the including the sharing of risk assessment. system for a long time and we go in and identify all the tax flows through a system and where the key Risk assessment procedures points are, where things will go wrong, that type of thing. (#15, HMRC official, 2005) The 2006 Review of Links with Large Business This illustrates Foucault’s concept of normali- (HMRC, 2006) highlighted the importance of zation such that the sane can be distinguished HMRC relationships with large corporates. It from the insane, the criminal from the non- proposed a framework for HMRC to disclose the criminal or, in this case, the taxpayers who risk assessment processes with large corporates comply and those who do not.4 Normalization and to have a greater awareness of business’s operates in such a way as to create an interaction viewpoint which necessitated a different type of between these distinctions (different distribution interaction with corporate taxpayers (Freedman, of normality) so as to bring the unfavourable in Loomer and Vella, 2009). Under the risk assess- line with the favourable such that people, movement process, each large corporate is given a risk ment and actions conform with the model score which is made up of an assessment of a (Foucault, 1978). Foucault further distinguished number of different aspects which tries to capture between disciplinary normalization which oper- an understanding of the tax environment of the ates in a binary way and normalization as an company. It includes an assessment of profit apparatus of security in which conduct is disci- levels, the magnitude of the balance sheet, the number of acquisitions and disposals of subsidi- 4I am grateful to an anonymous reviewer who brought ary companies, whether the treasury function is this to my attention.

© 2013 The Author(s) British Journal of Management © 2013 British Academy of Management. The Changing Role of Tax Governance S125 plined within a series of probable events. By using enabling relationship and customer satisfaction risk management practices, HMRC services are by HMRC has been to the detriment of the regu- tailored to particular customer groups, distin- lating relationship. guishing not just between individuals and large In addition to having an impact on the system corporates but between those who are perceived of regulation, this visibility of the customer has by HMRC to be low risk and those who are not. had organizational and structural effects within More recently the circumstances when negotia- HMRC. HMRC has responded by introducing its tions between HMRC and large corporations strategy that is focused on the customer experi- take place over the tax treatment of items where ence (HMRC, 2010). HMRC’s Business Plan for the law is unclear or has not foreseen the particu- 2011–2015 describes its vision and how this vision lar circumstances have been extended. Dave Hart- is shaping HMRC’s organization. One HMRC nett, the then permanent secretary at HMRC, official explained: commented in an interview with the Financial We are using our customer-centric strategy to Times that HMRC will pursue a less aggressive deliver this transformation. Using our understand- approach to settling tax issues so that more cases ing of customers to focus our efforts where they will can be resolved (Houlder, 2010). The objective have the biggest effect, tailoring our services to the would be to reach agreement where there were a needs, abilities and motivations of our customers. number of different interpretations of the law and (#15, HMRC official, 2010) in some cases to use third party mediation. This alters the relationship between HMRC It would thus seem that the customer concept is and the customer. The corporate customer as a shaping the operations and business of HMRC visible customer gains greater prominence within as opposed to or in addition to implementing HMRC. With this greater prominence the cus- government policy. One HMRC departmental tomer is no longer a passive subject that can be finance director commented in late 2010 that regulated independently of its wishes. It is ‘Customer satisfaction has been identified as our acknowledged that the customer is an important priority so that’s what we make sure is protected’ actant in the regulation process; as one IR official (#16, HMRC finance official, 2010). noted, ‘Customer is a useful phase; it encourages a In response to the need to cut the UK public state of mind in [HMRC] staff; “We [HMRC] rely sector deficit and reduce government spending on customers. We cannot do anything we like” ’ and in common with other government depart- (#8, IR official, 2003). ments, HMRC had to make substantial efficiency The House of Commons Public Accounts savings and reductions in expenditure. It is Committee (PAC) in December 2011 following unclear how the cuts will impact on customer the review of HMRC departmental accounts service standards. HMRC has to reduce its 2010–2011 by the National Audit Office (NAO, running costs by £1.6 billion over four years. The 2011a) disapproved of this approach. In their National Audit Office report identified that report, the PAC was critical of the relationship HMRC has not defined its targets for either busi- between HMRC and large corporates. ness performance or customer service. Although running costs are known, there is a lack of under- We have serious concerns that large companies are standing of the relationship between costs and treated more favourably by the Department value (NAO, 2011b, p. 9). [HMRC] than other taxpayers . . . Building on Miller and Rose’s (2008, pp. 212– 214) three characteristics of advanced liberalism, The Department has left itself open to suspicion that Table 2 summarizes the key themes arising its relationships with large companies are too cosy. from the data and provides further illustrative (House of Commons PAC, 2011, p. 4) quotations.

Despite the fact that large corporates have always been in a position of power with regard to the UK Discussion tax authorities, this could be an indication of increased power by large corporates in their rela- Miller and O’Leary (1987) argue that the power of tionship with HMRC such that the pursuit of an liberal democratic states relies on the construction

Table 2. Key themes

First-order theme Second-order theme

New specification Acknowledgement A customer. I think that to some extent that’s a bit of a misuse of language. But if it means that there is of the subject of of change some sort of recognition that we are moving away from the days that the Revenue just asked government questions and reached conclusions and that they are more prepared to deal with you on real time and deal with transactions, and more recognition on their part. I think this is where there is scope some way to go. Some recognition on their part that not everything in commercial life is driven by the tax department (F, Tax director FTSE 100 company, 2002) Counter-conduct It’s – an odd concept! Whereas we’re not, we’re taxpayers. I could understand it from a sort of resistance customer service perspective. They need to be able to respond to us in a timely fashion. But at the end of the day we’re not customers. We’re paying, we’re having to pay a proportion of our profits away and so as much as I understand them calling us customers, we are still taxpayers (N, Tax manager FTSE 100 company, 2003) New relation Calculative Well I think they have their customer charter these days and they are measured on that (X, Tax partner, between practices 2002) expertise and So [customer service] is difficult to measure, but we’re trying to measure what we input into that politics area to come back to what we’re here to do. Then we went into what does the customer actually need in terms of working closer with them or how do we add value. ‘What’s the customer satisfaction? Are they happy with us?’ and things like that. At the moment [added value to the customer] is measured on first of all the change that we implement in new programmes and also by a customer survey. On programmes what we do, for example . . . last year all we did was actually record what our expenditure was from lovely spreadsheets and things like that and I said ‘Well that’s nice. That’s like a bank statement. We expect that, but where’s the value added plan?’ and so we started delivering things like a scorecard (#20, HMRC official, 2010) New pluralization Enabling vs Because the other words at the moment are ‘enabling’ and ‘enforcing’ and everything I’ve seen or of social regulating: heard suggests this is a very, very difficult initiative to reconcile. How can you reconcile ‘enabling’, technologies resistance to which is the customer friendly approach, to ‘enforcing’, where you have Nick Montagu standing up change, and telling the Chartered Institute of Taxation that we’re about to target large multinationals, counter-conduct confusing fraud and normal avoidance or planning (whatever you want to use that word), even confusing transfer pricing and fraud. This isn’t a scale with a balance, I think. I think, for what it’s worth, two irreconcilable initiatives, which actually, I think, are sending out a very confusing message and I’ve certainly heard it said amongst tax inspectors that they’re confused as to where, actually, they are. Are they helping taxpayers to get the law right, which is what ‘enabling’ is about, or are they coming down hard on taxpayers when taxpayers get the law wrong? (W, Tax partner ex HMRC, 2003) New pluralization Feeling of change I think what has changed over the years has been the wider contribution case director makes. Quite of social – different roles often a lot of us, and me in particular, spending so much time on wider departmental matters that technologies and activities they’re not doing as much [of technical enquiries] or having the contact with the groups as they used to, and you have to rely much more on your B2s or B1s [more junior members of staff] to do that (#15, HMRC official, 2005) Impact on HMRC Counter-conduct I think that the thing that influences the Revenue behaviour more and more is the management focus on resistance the customer because at the regional office level there are people who are customer service managers. Now if you know that and if you know there is more likelihood of your work being reviewed then it is more likely that you will behave in a way that doesn’t cause your work to be reviewed because there is nothing worse than a complaint because first of all you have to do a lot of work to do a report on a complaint and then you don’t know what’s going to happen and we go back to the way the Civil Service works again, I think. If you can avoid something happening, you will (W, Tax partner ex HMRC, 2003) Reducing diversity Customer satisfaction has been identified as our priority so that’s what we make sure is protected and it of activities means hard messages for people who’ve got their pet projects, but sorry, it’s not on the table anymore (#17, HMRC finance official, 2010) Operational Strategy is based around customer interventions. So it doesn’t matter what sort of customer you are to influence us; we’re looking at you in a particular way. It would always be fair to say that high value customers are a particular type of customer to us as opposed to just everybody, but we’re starting to look at that and that may well, enabled with the costing thing, give us to be in a better place to say to Treasury not just a pound of this equals, but also ‘this type of customer can be managed in this way’ (#18, HMRC official, 2010) Linking cost and They’re taking it very seriously and, you know, it does mean finance is at the table. I mean one of the change things we’ve been doing as a department over the last few months is to sort of really crystallize where we’re going and it’s not difficult, but we’ve come up with a triangle to sort of show what’s important to us and to sort of provide a framework for decisions and it’s got bringing in the revenue, you know, satisfaction of our customers to the right extent and cost. Now not revolutionary, but putting cost on the same path as keeping your customers happy and bringing in the revenue is actually hugely important (#19, HMRC finance official, 2010)

© 2013 The Author(s) British Journal of Management © 2013 British Academy of Management. The Changing Role of Tax Governance S127 of governable persons. The state was transformed The customer discourse approach has become ‘into a centre that could programme, shape, guide, embedded in HMRC organization (Tuck, Lamb channel, direct, control events and persons distant and Hoskin, 2011) and strategy, such that follow- from it’ (Miller and Rose, 2008, p. 202). Neo- ing the HMRC’s Operating Model HMRC are liberalism does not give freedom to any subject/ working in partnership with large corporates over individual but only those subjects/individuals risk assessments and risk management. Risk whose behaviours are shaped and defined by the assessment practices have been introduced for state. Neo-liberal governmentality has three char- examining tax returns such that behaviour by the acteristics: a new identification of the subject of large corporations can be normalized. The HMRC government; a different connection between gov- has moved away from conducting their direct taxa- ernment and politics where targets and quantifi- tion enquiries by 30 page letters to focusing their able performance targets are employed; and the correspondence on a small number of key areas introduction of a form of government which and discussing tax affairs in meetings including the shapes the activities of those who are governed. sharing of risk assessments. In addition, HMRC The customer discourse was introduced by assist companies with their internal systems so that HMRC to include taxpayers and the users of its the data captured by those accounting systems are services. Taxpayers were reconstructed as custom- of the correct format and accurate to include in the ers and self- assessment of taxation was intro- tax return. The enabling strategy of HMRC and duced where the responsibility for calculating the pursuing a less aggressive approach has been advo- tax due and the submission of an accurate return cated so that a greater role for negotiation could be was transferred from HMRC to the taxpayer cus- employed to settle outstanding tax disputes. tomer. Initially, customer discourse was seen as However, this approach has not been without cosmetic change in the approach to dealing with its critics: the PAC has referred to this as a too taxpayers at a superficial level. However, its intro- ‘cosy relationship’ (House of Commons Public duction met with resistance from large corporates Accounts Committee, 2011, p. 4). and ‘customer’ was seen to be an inappropriate However, the relations between large corpora- term to describe the change in approach, espe- tions and HMRC are being re-engineered as a cially when the customers do not understand what result of the change in HMRC practices. Customer service is being delivered to them. In particular it service is embedded within HMRC such that cus- is difficult to identify who is the customer of tomer satisfaction is a priority for HMRC. HMRC: the taxpayer, HM Treasury, the UK gov- HMRC’s vision is to be a customer-centric organi- ernment or the public at large. This results in a zation where customer satisfaction targets are a confused image from HMRC’s perspective. priority for resources at the expense of other pro- Townley (1998, p. 193) argues that ‘for a domain jects. The strategy of HMRC is embedded. to be governed, it first has to be made knowable’. Thus HMRC, the regulator, is moving towards Following on from this, I argue that customers being a customer service provider. There has been need to be constructed and made knowable in less attention in the management literature to order to be governed and for ‘customer service’ to bottom-up governmentality and situated dis- be provided, and that this involves the creation of courses (Munro, 2012). This paper demonstrates new calculable spaces (Miller and Rose, 1990). In the recursive nature of governmentality: in the addition, HMRC adopted the strategy of being an process the regulatee reconstructs the regulator. ‘enabling’ department, which is judged on the A key limitation of this study is that the data quality of service it provides to its customers, the were obtained from semi-structured interviews taxpayers. In common with the development of where the parties concerned talked about the increased regulation as described in the ‘audit practices that they engaged in from their own per- society’, where there has been an increased focus spective. Other data were obtained from public on outcome based measures and organizations are documents to support the interview data. Obser- subjected to reviews, assessments and other checks vation of the practices taking place, such as (Power, 1997), this quality of service became rep- attendance at taxpayers’ meetings with HMRC or resented as a measurement of customer service. attendance at internal meetings of HMRC, would This was manifested in customer satisfaction have enabled witnessing at first hand the practices targets. being undertaken.

Notwithstanding that this paper has focused on This paper, building on Miller and Rose’s three UK tax administration and in particular on direct characteristics of advanced liberalism, namely ‘a taxation, it is relevant to other jurisdictions new specification of the subject of government’, a and departments of government. The customer ‘new relation between expertise and politics’ and a concept with respect to taxpayers has been intro- ‘new pluralisation of social technologies’ (2008, duced in other countries including the USA and pp. 212–214), has increased our understanding of Norway (Aberbach and Christensen, 2007). Like- neo-liberal governmentality. It has extended this wise the customer/consumer concept has been literature by examining counter-conduct (resist- introduced in different parts of the public sector ance) and has investigated the impact on the regu- such as the health service, social care and the lator of pursuing these policies. I have shown that police (Clarke et al., 2007). The introduction of the introduction of disciplining techniques and disciplining technologies on users of public ser- technologies of government on those who are vices have unintended consequences on those who governed cannot be looked at in isolation. The govern. How have these entities been transformed public sector has increasingly tailored its services or restructured in the process or as a consequence to focus on the service user to improve its offer- of these technologies? Further research is needed ings. The service user has been reconstructed as a to explore the implications of these consequences. customer so that the customer can choose where Although change was not the primary focus of to obtain services such as choosing which hospital this study, it would be interesting to explore the to go to. Despite this illusion of empowerment, feeling of change over the period of study to see the quality of customer service is regulated how the individuals – the tax officials, the tax through the imposition of targets. The governor advisors and tax directors – came to terms or did or regulator has to respond to these changing not come to terms with the implications of the practices that they themselves have utilized to imposed changes. govern, such that the technologies employed to govern actually impact on the regulator and so that the governed gain increased visibility. Cus- tomer service thus becomes a priority for the regu- Conclusion lator. The traditional view within management research of governmentality being a top-down By examining the remaking of the corporate tax- approach seems to be evolving into a new two- payer as a visible customer I have explored and way approach, illustrating the recursive nature of extended how we should understand the notion of governmentality. neo-liberal governmentality, which is implicated in aspects of service provider/customer relations as well. Neo-liberal government is the activation References of the powers of the citizen by the responsible conduct of individuals (Rose, 1999). Individual Aberbach, J. and T. Christensen (2007). ‘The challenges of mod- conduct is regulated by mechanisms, technologies ernizing tax administration: putting customers first in coer- and practices. Rose further suggests that this cive public organizations’, Public Policy and Administration, 22, pp. 155–182. approach involves not just a reconfiguration of Alford, J. (2002). ‘Defining the client in the public sector: a those who are governed but also a re-examination social-exchange perspective’, Public Administration Review, of the interrelationships between the governed 62, pp. 337–346. and the governors. It is the change in the process Ayers, I. and J. Braithwaite (1992). Responsive Regulation. of regulation from the exercise of political power Oxford: Oxford University Press. Black, J. (2005). ‘The emergence of risk-based regulation and by the ruler to the rational calculation of those the new public risk management in the UK’, Public Law, 3, who are governed (Foucault, 1979b). Foucault pp. 512–548. (1979b) acknowledges that this process of ‘regu- Blair, T. (2001). Speech to public sector workers at the British lated freedom’ has a limit. The practices of neo- Library, London. Available at http://www.guardian.co liberal governance will not ensure all taxpayers .uk/society/2001/oct/16/publicservices.speeches (accessed 16 October 2012). are compliant. It only ensures that there is a Boden, R., S. Killian, E. Mulligan and L. Oats (2010). ‘Critical balance between tax collection and non- perspectives on taxation’, Critical Perspectives on Accounting, compliant taxpayers. 21, pp. 541–544.

Braithwaite, V. (2007). ‘Responsive regulation and taxation: Corlett, C. (1994). ‘The Times letters’, 11 January. Quoted in introduction’, Law and Policy, 29, pp. 3–11. Inland Revenue Customer Services Manual, March 1999, Brown, A. and M. Lewis (2011). ‘Identities, discipline and rou- obtained from Inland Revenue Manuals, CCH British Tax tines’, Organization Studies, 32, pp. 871–895. Service (accessed 13 March 2003). Brown, A., S. Ainworth and D. Grant (2012). ‘The rhetoric of Curtis, B. (2002). ‘Foucault on governmentality and population: institutional change’, Organization Studies, 33, pp. 297–321. the impossible discovery’, Canadian Journal of Sociology, 4, Brunsson, N. and K. Sahlin-Andersson (2000). ‘Constructing pp. 505–533. organizations: the example of public sector reform’, Organi- Farron, S., C. Gowthorpe and C. Pilkington (1999). ‘The mar- zation Studies, 21, pp. 721–746. keting of compliance: the Inland Revenue’s “brief from Burchell, S., C. Clubb and A. Hopwood (1985). ‘Accounting in hell” ’, British Tax Review, 4, pp. 284–297. its social context: towards a history of value added in the Ferlie, E., G. McGivern and L. FitzGerald (2012). ‘A new mode United Kingdom’, Accounting, Organizations and Society, 10, of organizing in health care? Governmentality and managed pp. 381–413. networks in cancer services in England’, Social Science and Burrell, G. (1988). ‘Modernism, post modernism and organiza- Medicine, 74, pp. 340–347. tional analysis 2: The contribution of Michel Foucault’, Flint, J. (2003). ‘Housing and ethopolitics: constructing identi- Organization Studies, 9, pp. 221–235. ties of active consumption and responsive community’, Bush, B. and J. Maltby (2004). ‘Taxation in West Africa: trans- Economy and Society, 32, pp. 611–629. forming the colonial subject into the “governable person” ’, Foucault, M. (1977). Discipline and Punish. London: Penguin. Critical Perspectives on Accounting, 15, pp. 5–34. Foucault, M. (1978). Security, Territory, Population: Lectures at Clarke, J., J. Newman, N. Smith, E. Vidler and L. Westmarland the College de France 1977–1978. English edition published in (2007). Creating Citizens–Consumers. London: Sage. 2007. New York: Picador. Cm 1599 (1991). The Citizens’ Charter. London: HMSO. Foucault, M. (1979a). ‘On governmentality’. In G. Burchell, C. Cm 1730 (1991). Competing for Quality. London: HMSO. Gordon and P. Miller (eds), The Foucault Effect: Studies in Cm 4079 (1998). Report of the Commissioners of Her Majesty’s Governmentality, pp. 87–104. New York and London: Inland Revenue for the Year ending 31st March 1998, One- Harvester/Wheatsheaf. hundred and Fortieth Report. London: HMSO. Foucault, M. (1979b). The Birth of Biopolitics: Lectures at the Cm 4181 (1998). HM Treasury – Public Services for the Future – College de France 1978–1979. English edition published in Modernisation, Reform, Accountability: Comprehensive Spend- 2008. Basingstoke: Palgrave Macmillan. ing Review: Public Service Agreements 1999–2002. London: Foucault, M. (1986). The Care of the Self: The History of Sexu- Stationery Office. Available at http://www.achive.official- ality, Vol. 3. London: Penguin. documents.co.uk/ (accessed 21 February 2003). Foucault, M. (1994). ‘The subject and power’. In J. Faubion Cm 4310 (1999). Modernising Government. London: Stationery (ed.), Essential Works of Foucault 1954–1984, Vol. 3: Power, Office, Cabinet Office White Paper. Available at http:// pp. 326–348. London: Penguin. www.cabinet-office.gov.uk/moderngov/download/ Freedman, J., G. Loomer and J. Vella (2009). ‘Corporate tax modgov.pdf (accessed 29 September 2001). risk and tax avoidance: new approaches’, British Tax Review, Cm 4315 (1999). HM Treasury – Public Services for the Future – pp. 74–116. Modernisation, Reform, Accountability: Comprehensive Gauke, G. (2010). ‘Remit for HM Revenue and Customs 2011– Spending Review: Public Service Agreements 1999–2002. 12’. Letter to Dame Lesley Strathie, available at http:// London: Stationery Office. March 1999 supplement. www.hmrc.gov.uk/about/ls-remit-letter.pdf (accessed 6 Cm 5118 (2001). Inland Revenue – The Government’s Expendi- December 2010). ture Plans 2001–2004. Presented to Parliament by the Pay- Glaister, K. and J. Frecknall Hughes (2008). ‘Corporate master General and the Chief Secretary to the Treasury, strategy formulation and taxation: evidence from March. Available at http://www.inlandrevenue.gov.uk/about/ UK firms’, British Journal of Management, 19, pp. 33– explan2001.pdf (accessed 30 January 2003). 48. Cm 5428 (2002). Inland Revenue – The Government’s Expendi- Gordon, C. (1991). ‘Govermental rationality: an introduction’. ture Plans 2002–2004. Presented to Parliament by the In G. Burchell, C. Gordon and P. Miller (eds), The Foucault Paymaster General and the Chief Secretary to the Treasury, Effect: Studies in Governmentality, pp. 1–51. Chicago, IL: June. Available at http://www.inlandrevenue.gov.uk/about/ University of Chicago Press. explan2002.pdf (accessed 8 December 2002). Graham, C. (2010). ‘Accounting and the construction of the Cm 5706 (2002). Report of the Commissioners of Her Majesty’s retired person’, Accounting, Organizations and Society, 35, pp. Inland Revenue for the Year ending 31st March 2002, One- 23–46. hundred and Forty-fourth Report. London: Stationery HC 494-I (1988). Eighth Report from the Treasury and Civil Office. Available at http://www.ir.gov.uk/pdfs/report2002.pdf Service Committee, Civil Service Management Reform: The (accessed 15 January 2003). Next Steps. London: HMSO. Cm 6163 (2004). Financing Britain’s Future: Review of the HM Government (2010). The Coalition: Our Programme for Revenue Departments. Gus O’Donnell. Presented to Parlia- Government. London: Cabinet Office. ment by the Chancellor of the Exchequer. HMRC (2005). The Whole Customer Vision, Practice and Design Cm 7774 (2009). HM Revenue and Customs Departmental Principles. Available at http://customs.hmrc.gov.uk/ Autumn Performance Report, 22 December. London: Station- channelsPortalWebApp/channelsPortalWebApp.portal? ery Office. _nfpb=true&_pageLabel=pageVAT_ShowContent&id= Cm 7942 (2010). HM Treasury – Spending Review. London: HMCE_PROD1_024818&propertyType=document Stationery Office. (accessed 5 February 2008).

HMRC (2006). 2006 Review of Links with Large Business (The Miller, P. and N. Rose (2008). Governing the Present: Adminis- Varney Report). London: Her Majesty’s Stationery Office, tering Economic, Social and Personal Life. Cambridge: Polity HM Revenue and Customs. Press. HMRC (2009). Working in Partnership: An Update for HMRC’s Montagu, N. (2003). ‘The Inland Revenue – strong on support, External Stakeholders. Available at http://www.hmrc.gov.uk/ strong on revenues’. Speech, Chartered Institute of Taxation, about/wip-booklet.pdf (accessed 6 December 2010). 9 January. Available at http://www.ir.gov.uk/news/tax_ HMRC (2010). Business Plan 2011–2015. Available at http:// avoidance_measures_sp.html (accessed 13 March 2003). www.hmrc.gov.uk/about/bus-plan-2011-15.pdf (accessed 6 Munro, I. (2012). ‘The management of circulations: biopolitical December 2010). variations after Foucault’, International Journal of Manage- Hoskin, K. and R. Macve (1986). ‘Accounting and the exami- ment Reviews, 14, pp. 345–362. nation: a genealogy of disciplinary power’, Accounting, NAO (1996). ‘Change management in the Inland Revenue’. Organizations and Society, 11, pp. 105–136. Report by the Comptroller and Auditor General. HC 140, Par- Hoskin, K. and R. Macve (1988). ‘The genesis of accountability: liamentary Session 1995–96, 21 February. the West Point connections’, Accounting, Organizations and NAO (2011a). ‘HM Revenue and Customs 2010–2011 Society, 13, pp. 37–73. accounts’. Report by the Comptroller and Auditor General. Houlder, V. (2010). ‘Tax officials to soften stance on avoidance’, NAO (2011b). ‘Reducing costs in HM Revenue and Customs’. Financial Times, 19 August. Report by the Comptroller and Auditor General. HC 1278, House of Commons Public Accounts Committee (2011). Sixty Session 2010–2012, 20 July. First Report HM Revenue & Customs 2010–2011 Accounts: Needham, C. (2006). ‘Customer care and the public service Tax Disputes, HC1531. London: Her Majesty’s Stationery ethos’, Public Administration, 84, pp. 845–860. Office. Neu, D. (2006). ‘The birth of a nation: accounting and Canada’s IFF Research (2011). ‘Large business panel survey: businesses’ first nations, 1860–1900’, Accounting, Organizations and experience of HMRC’, HM Revenue and Customs Research Society, 31, pp. 47–76. Report 142. London: HM Revenue and Customs. Ogden, S. G. (1997). ‘Accounting for organizational perfor- Inland Revenue Customer Services Manual (1999). Inland mance: the construction of the customer in the privatized Revenue Manuals, CCH British Tax Service. London: CCH. water industry’, Accounting, Organizations and Society, 22, IR (2001). Review of Business Links (The Hartnett Report). pp. 529–556. Inland Revenue, November. Available at http://www. Power, M. (1997). The Audit Society. Oxford: Oxford Univer- inlandrevenue.gov.uk/pbr2001/businesslinks.pdf (accessed 11 sity Press. February 2003). Preston, A. (1989). ‘The taxman cometh: observations on the Laing, A. and G. Hogg (2002). ‘Political exhortation, patient interrelationship between accounting and Inland Revenue expectation and professional execution: perspectives on the practice’, Accounting, Organizations and Society, 14, pp. 389– consumerization of health care’, British Journal of Manage- 413. ment, 13, pp. 173–188. Preston, A., W. F. Chua and D. Neu (1997). ‘The diagnosis- Lamb, M. (2001). ‘ “Horrid appealing”: accounting for taxable related group prospective payment system and the problem profits in mid-nineteenth century England’, Accounting, of the government of rationing health care to the elderly’, Organizations and Society, 26, pp. 105–172. Accounting, Organizations and Society, 22, pp. 147–164. Lemke, T. (2001). ‘The birth of bio-politics – Michel Foucault’s Radnor, Z. and G. Bucci (2007). Evaluation of PaceSetter, lecture at the College de France on neo-liberal governmental- Lean, Senior Leadership and Operational Management ity’, Economy and Society, 30, pp. 190–207. within HMRC Processing. Kenilworth: A to Z Business Malam, S., A. Fearn, R. McLeod, D. Elston and H. Kilshaw Consultancy. (2010). ‘Large business customer survey’, prepared for HM Randall, J. and S. Procter (2008). ‘Ambiguity and ambivalence: Revenue and Customs. Her Majesty’s Revenue and Customs senior managers’ accounts of organizational change in a Research Report 102, TNS-BMRB. London: HM Revenue restructured government department’, Journal of Organiza- and Customs. tional Change Management, 21, pp. 686–700. McKee, K. (2009). ‘Post-Foucauldian governmentality: what Rondeaux, G. (2006). ‘Modernizing public administration: the does it offer critical social policy analysis?’, Critical Social impact on organizational identities’, International Journal of Policy, 29, pp. 465–486. Public Sector Management, 19, pp. 569–584. McKinlay, A. and E. Pezet (2010). ‘Accounting for Foucault’, Rose, N. (1999). Powers of Freedom: Reframing Political Critical Perspectives on Accounting, 21, pp. 486–495. Thought. Cambridge: Cambridge University Press. McKinlay, A. and K. Starkey (1998). ‘Managing Foucault: Rosenthal, P. and R. Peccei (2007). ‘“The work you want, the Foucault, management and organization theory’. In A. help you need”: constructing the customer in Jobcentre Plus’, McKinlay and K. Starkey (eds), Foucault, Management and Organization, 14, pp. 201–223. Organization Theory, pp. 1–13. London: Sage. Skalen, P. (2004). ‘New public management reform and the Miller, P. (1990). ‘On the interrelations between accounting and construction of organizational identities’, International the state’, Accounting, Organizations and Society, 15, pp. 315– Journal of Public Sector Management, 17, pp. 251–263. 338. Skalen, P. (2009). ‘Service marketing and subjectivity: the Miller, P. and T. O’Leary (1987). ‘Accounting and the construc- shaping of customer-oriented employees’, Journal of Market- tion of the governable person’, Accounting, Organizations and ing Management, 25, pp. 795–809. Society, 12, pp. 235–265. Skalen, P., M. Fellesson and M. Fougere (2006). ‘The govern- Miller, P. and N. Rose (1990). ‘Governing economic life’, mentality of marketing discourse’, Scandinavian Journal of Economy and Society, 19, pp. 1–31. Management, 22, pp. 275–291.

Sturdy, A., I. Grugulis and H. Willmot (2001). Customer Service: Tuck, P., M. Lamb and K. Hoskin (2011). ‘Customers? The Empowerment and Entrapment. Basingstoke: Palgrave. reconstruction of the “taxpayer” in Inland Revenue discourse Thornborrow, T. and A. Brown (2009). ‘ “Being regimented”; and practice’, Accounting and Business Research, 41, pp. 357– aspiration, discipline and identity work in the British Para- 374. chute Regiment’, Organization Studies, 30, pp. 355–376. Waring, J. (2007). ‘Adaptive regulation or governmentality: Townley, B. (1998). ‘Beyond good and evil: depth and division patient safety and the changing regulation of medicine’, Soci- in the management of human resources’. In A. McKinlay and ology of Health and Illness, 29, pp. 163–179. K. Starkey (eds), Foucault, Management and Organization WPP (2007). Annual Report and Accounts 2006. London: WPP Theory, pp. 191–210. London: Sage. Advertising.

Penelope Tuck is Professor of Accounting, Public Finance and Policy at Birmingham Business School, University of Birmingham. She holds a PhD from the University of Warwick and is a Chartered Accountant and a Chartered Tax Advisor. Penelope’s research interests focus on public ﬁnance from a social and institutional perspective, in particular examining the interplay between identity, power and knowledge, and governance in a public policy context. She is a member of the Chartered Institute of Public Finance and Accountancy (CIPFA) Central Government Panel. She is also a member of the Education Committee of the Chartered Institute of Taxation.