This is under the condition, set by the Office of the Advisory Committee on Business Appointments (the Committee), that Sir Edward not advise EU tax administrations on relevant Brexit-related issues.
The Committee said he will have to wait two years from his last date of service before he can work on UK tax affairs, the tax affairs of McKinsey or its clients other than overseas administrations, or have dealings with any part of the UK government, among other things.
Sir Edward last worked for the government on 15 January this year after announcing his retirement in September last year.
The Committee noted that there was a risk in Sir Edward moving from HMRC to an appointment in the same sector, but it pointed out that prior to becoming a civil servant he was a professional tax lawyer and as such was returning to this work.
It went on to say that Sir Edward should be subject to the condition that he not draw on privileged information gained while working for HRMC.
Sir Edward told the Committee that he had contacted McKinsey’s competitors (Deloitte, PwC, KPMG, EY and PA Consulting) to ensure there were no issues with his appointment in regards to commercially sensitive information gained at his time at HMRC.
Concerns were raised that there was a risk of the appointment being seen as a “reward” for HMRC award a £680,000 contract to McKinsey to design a Brexit customs arrangement.
However, the Committee deemed that Sir Edward had no direct engagement with McKinsey on any paid advice provided to HMRC. Additionally cabinet secretary Sir Jeremy Heywood confirmed that he had no involvement in contract letting of contract management.
The committee published the letter at the end of last week, after Sir Edward had officially started in his new role.
Sir Edward joined the Treasury in 1995 after qualifying and practising as a tax lawyer and returned to private practice two years later in 1997.
He later rejoined the Treasury as director of indirect tax in 2004 and then became director general of tax and welfare before joining HMRC, where he spent five years.
In November, the accountancy profession responded positively to the news that Jim Harra, HMRC’s tax assurance commissioner and director general customer strategy and tax design as second permanent secretary.
This appointment will mean that HMRC will continue to have a tax professional as one of its two permanent tax secretaries.