Judge to rule on HMRC’s tax deal with Goldman Sachs

A judge is being asked to decide if HM Revenue and Customs (HMRC) acted illegally by letting investment bank Goldman Sachs off part of its tax bill. Campaign group UK Uncut Legal Action claims the taxpayer missed out on up to £20m as a result of what it calls a “sweetheart” deal.

HMRC admits that it should recovered at least another £5-8M, and that it has since changed the way it negotiates tax deals with big companies. HMRC admits that over a period of years in the 1990s, Goldman Sachs had avoided tax by routing bonus payments through a subsidiary in the British Virgin Islands saving a fortune by non payment of National Insurance (NI) contributions.

Instead of going through a legal process to recover the money that they believed was owed to the taxpayer, Dave Hartnett, formerly in charge of HMRC decided to come to an arrangement with Goldman Sachs directly, in what is known as a “bespoke settlement”.

Although Goldman Sachs has since paid the missing NI, they failed to pay the interest which was due.

HMRC admitted it had made a mistake, and said it should have collected up to £8m that was owed by the bank. However a whistle-blower has informed the Public Accounts Committee that the amount may have been nearer to £20m.

UK Uncut Legal Action’s costs are being funded by public donations, which have amounted to £20,000.

“We want to show HMRC that doing these tax deals is not politically, legally or morally acceptable.” If you want to make a donation to UK Uncut you can follow this link. http://www.ukuncut.org.uk/

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About Ray L Best

Ray Best has had over 30 years experience of advising on complex financial matters. A published author of a number of books including “Partnership and Shareholder Protection”, Inheritance Tax Simplified”. We provide an initial meeting at no cost and only engage with clients when we can add significant value.

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