THE HIGH COURT has dismissed claims by activism group UK Uncut that HM Revenue & Customs entered into a ‘sweetheart’ deal with investment bank Goldman Sachs, costing the public purse £20m.
Then-chief executive of HMRC Dave Hartnett agreed in 2010 to waive interest penalties of up to £20m on offshore bonuses paid to bank staff in order to end a long-running and potentially costly dispute.
That deal, along with four other similar accords, was found to be “reasonable” in June 2012 after a report produced by Sir Andrew Park for the National Audit Office.
Judge Justice Nicol said in his ruling that the episode was “not a glorious episode in the history of the Revenue”, but not unlawful. HMRC added it had changed its practices since the deal was made in 2010, and that the public purse had lost £8m at most through the agreement.
In a statement, HMRC director-general for business tax Jim Harra (pictured) said the ruling dispelled the “fallacy that HMRC is soft on large business”.
He said: “HMRC has an exemplary record in relentlessly challenging those who avoid tax. We have recovered £34bn in additional revenues from large businesses in the last seven years.
“The High Court’s judgment confirms what HMRC has always said: that while we made errors in settling the Goldman Sachs dispute, we made the right settlement in the circumstances, and that our decision was both proper and lawful.
“This issue has been rigorously and repeatedly scrutinised – by the Public Accounts Committee, by a retired High Court judge on behalf of the National Audit Office and now by the High Court itself.
“The public can have confidence in our governance processes, which we have strengthened, providing greater levels of scrutiny, transparency and role separation.
“In its definitive judgment, the High Court has now drawn a line under the Goldman Sachs issue. HMRC can now get on with the critical job of working to ensure that all individuals and companies, big and small, pay the tax they owe to fund the UK’s essential public services.”
UK Uncut campaigns director Anna Walker said: “Obviously while we are deeply disappointed that this deal has not been declared unlawful, the judge’s ruling that top HMRC officials played politics with major tax deals to protect Osborne’s reputation is a major victory in exposing the truth behind these secret deals.
“Despite not having won the case today we still feel that this judgment has demonstrated that the government is making a political choice to cut legal aid, public services and the welfare system, rather than take action to make corporate giants like Goldman Sachs, Amazon or Google pay their fair share of tax.
“This case has exposed the lengths the government will go to look tough on tax avoidance and has been vital in holding the government to account for its shameful actions.”
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government