HMRC in dock over tax avoidance
This week a court heard the evidence surrounding the controversial "sweetheart" tax deal between HM Revenue & Customs and Goldman Sachs, worth up to £20m.
UK Uncut Legal Action is asking for a judgement on whether the 2010 settlement between Goldman and the tax authority was unlawful.
The court heard that Dave Hartnett, then the permanent secretary for tax, personally overruled legal advice, the HMRC's own guidelines and its internal review board, which stated that HMRC was in a position to force Goldman Sachs to pay back the money owed.
Hartnett struck a deal in a "handshake" with Goldman Sachs on 19 November 2010 to end a dispute over national insurance contribution payments dating back to the 1990s, the court was told.
Hartnett wrote that he decided to settle the long-running dispute to stop any embarrassment to the Chancellor George Osborne after Goldman Sachs threatened to pull out of a prized new tax framework a week after the chancellor had announced that the bank had signed up to it.
Ingrid Simler QC, for UK Uncut Legal Action, said HMRC reached a settlement in a dispute over national insurance due on bonuses with Goldman Sachs in 2010 without requiring the payment of interest. The potential cost to the taxpayer of the HMRC/Goldman Sachs settlement is officially put at £8m but an HMRC solicitor-turned-whistleblower, Osita Mba, claimed the sum could be as high as £20m.
Rosa Curling, a solicitor from the law firm Leigh Day, which is representing UK Uncut Legal Action, told the Guardian: "Our hope is that this legal action will not only declare this decision to 'let off' Goldman Sachs for tax owing unlawful, but also deter any more deals being done behind closed doors."
The Guardian this week revealed that the scale of the government's "sweetheart" tax deals – individual secret agreements drawn up between tax officials and corporations to settle disputes – after four settlements were shown to be worth £4.5bn between them.
If UK Uncut's challenge is successful, HMRC will come under further pressure to say how much tax was owed by each of the four unnamed companies before the deals were struck.
This story has been added to our corporate database. The database powers all our live product guides, giving the score for each company on our rankings tables.
See our tax campaign - Boycott Amazon
Register on the site to receive our free monthly email newsletter and keep up-to-date with all our research and campaigning.
Ethical Consumer on Google+