Menu Close

‘Sweetheart’ deal between HMRC and Goldman Sachs was struck to save Government embarrassment, court hears

 

Tom Peck

Thursday, 2 May 2013

A so-called “sweetheart” tax deal between Her Majesty’s Revenue and Customs and the investment bank Goldman Sachs was struck to avoid “major embarrassment” to the Chancellor George Osborne, a court has heard.

Dave Hartnett, who was the top ranking civil servant at HMRC, agreed the deal at the offices of Goldman Sachs in November 2010, waiving them of anywhere between £6m and £20m in interest owed to the exchequer. The deal has since become the subject of a legal challenge by the tax campaigning pressure group, UK Uncut.

The hearing at London’s High Court heard that Mr Hartnett wrote in an email: “The risks here are major embarrassment to the [Chancellor of the Exchequer], HMRC, the [large business service of the HMRC], you and me, not least if GS withdraw from the code.”

A week before the email was sent, the chancellor had publicly announced the government was taking action on tax avoidance by big banks, and had forced the UK’s fifteen largest banks, including Goldman, to sign up to a new code of practice on taxation – the code referred to in Mr Hartnett’s email.

Ingrid Simler QC, acting for UK Uncut, told the court that the email was “the best evidence there is” of Mr Hartnett’s thinking before the tax deal was approved on December 9 2010.

HMRC’s High Risk Corporate Programme Board, an internal oversight board, eventually rejected the deal and recommended that negotiations be re-opened to recoup the money owed.

Mr Hartnett’s email said that Goldman Sachs “went off the deep end” in response.

In Mr Hartnett’s written witness statement, he states that “Goldman Sachs had been involved in tax avoidance in the past and we regarded their signing of the Code as a valuable step in securing improved tax behaviour from them. This would have been under threat had we reneged on the settlement (they said they would withdraw from the Code if HMRC reopened the settlement).”

The judicial review continues.

http://www.independent.co.uk/news/uk/home-news/sweetheart-deal-between-hmrc-and-goldman-sachs-was-struck-to-save-government-embarrassment-court-hears-8601007.html#

 

%d bloggers like this: