Nobody is perfect, everyone makes mistakes. What is vital is putting your hands up to making an error and to learn from them.
But having watched MPs probe incoming FCA chairman Charles Randell over his tax affairs and recently watched an episode of Room 101 featuring comedian Jimmy Carr, I was left feeling the latter understands this important life lesson better than the former.
Mr Randell, currently an external member of the Bank of England's prudential regulation committee, was a member of Ingenious Film Partners two LLP between 2006 and 2011.
He said he considered the fact he hadn't made "sufficient investigation" into the scheme and claimed the fact he had relied on his financial adviser was an "error of judgement".
Mr Randell said: "I need to be careful here because anything I say will sound like an excuse and I take responsibility for the decision that I took, but I was reassured to hear that this partnership had been discussed with senior policy officials at HMRC who had indicated that they approved of it.
"It is clear to me now that far from taking any comfort from that, I should have seen it as a warning signal.
"The mere fact that an informal assurance was seen to be necessary should have been telling me that this was an investment for which there wasn't a specific statutory framework, there wasn't a binding approval mechanism and if HMRC did approve it in 2005, which I have been told repeatedly is the case, then it was always open to them to change their mind, which they obviously did do."
Mr Randell said he had not given specific instructions to his adviser which would have led them to recommend this investment.
He told the committee he had since "dispensed with the services" of his financial adviser, asked HMRC to provide him with an individual bill for the amount of tax he owed and paid this back in 2015.
The total bill came to around £114,000 plus interest.
After the hearing the Treasury select committee concluded Mr Randell acknowledged that he had made an error of judgement by participating in the scheme and that they were reassured there are no other aspects of his personal tax affairs that might cast his judgement into further question.
The committee concluded it was satisfied that Mr Randell has the professional competence and personal independence to be chairman of the Financial Conduct Authority.
But I found the comments made by Mr Randell concerning as while it is good to hear he now acknowledges investing in this scheme was an error, it wasn’t so positive to hear him gesture that it wasn’t entirely his fault.
Given the role he is about to step into, he is supposed to be an adult with more knowledge of financial services and tax than most and, therefore, the fact he in any way pointed the finger at a financial adviser is worrying.
Heck, even comedian Mr Carr didn’t point the finger of blame at his financial adviser during his recent appearance on BBC1’s comedy panel show Room 101.
Mr Carr, who was named and shamed by then prime minister David Cameron as one of the high profile names using the now infamous K2 tax avoidance scheme back in 2012, managed to send tax loopholes into the Orwellian room of hatred.
Like the incoming FCA chairman the comedian admitted he had “made a terrible error of judgement” regarding the decision to use the initiative and clearly regrets the fact the label of ‘tax avoider’ has followed him around ever since.
All I can say is if Mr Carr can put his hands up and admit his mistake and learn from it, then it was a bit of a poor show from the new FCA chairman to try to distance himself from his decision by pointing out he has now dispensed with the adviser who recommended the investment.
emma.hughes@ft.com
