HMRC to be sued by UK Uncut for that £10m 'gift' to Goldman Sachs?
A little while ago, we told you how HMRC (and specifically retiring permanent Secretary Dave Hartnett) had been criticised for offering big business the kind of sweetheart deals that lost the country £tens of millions in tax, while simultaneously chasing Bob the Plumber for an unpaid £2.50.
HMRC has promised to clean up its act, but that isn’t enough for social action group UK Uncut who have just been granted permission to take HMRC to court over the Goldman Sachs deal, where the firm was ‘let off’ at least £10m in interest charges.
Of course you can’t actually sue HMRC, nor any of its officers personally, but there is a legal remedy called Judicial Review, which is a way of holding public bodies to account, where a judge decides whether the actions of the public body were, in fact, lawful.
If the case, brought by UK Uncut Legal Action is allowed and goes on to be successful, the sugary agreement could be quoshed, and Goldman Sachs could be made to cough up the lot. Further whistle blowing contends that the waived sum is closer to £20m than £10m, and UK Uncut think that’s worth going after.
And it should make interesting viewing. As part of parliamentary hearings in December, Dave admitted that he did not consult lawyers properly and should have demanded that Goldman pay the interest owing after the bank spent yearsavoiding tax and national insurance and then a further five years resisting HMRC's claims.
Internal minutes published by the Guardian showed that Dave Hartnett, had personally met Goldman’s tax director, Mike Housden, and as a result “a late submission had come in about a deal on which Hartnett had ‘shaken hands’ with Goldman Sachs”, despite HMRC’s own QC, Malcolm Gammie, giving the “broadly positive” opinion that the government was in a strong position to get all of its money.
Under Judicial Review, a decision made by a public body may be found to be unlawful if
the decision-maker does not have power to make that decision, or is using the power they have for an improper purpose;
the decision is irrational;
the procedure followed by the decision-maker was unfair or biased;
the decision was taken in breach of the Human Rights Act; or
the decision breaches European Community (EC) law.
It is also unlawful for a public body not to do something it has a duty to do.
UK Uncut Legal Action, and their lawyers Leigh Day claim the Goldman Sach’s decision was contrary to HMRC’s own policies and strategy and therefore unlawful. The court papers also argue that it was "improper" for Hartnett to be directly involved during negotiations and that HMRC was using "taxpayer confidentiality" as an excuse to "prevent judicial scrutiny of its own errors, not to protect genuinely confidential taxpayer information.
Goldman Sachs, who have just posted profits of £1.32bn for the last quarter have reportedly not opposed the hearing nor rebutted the claims directly.
Tim Street, the director of UK Uncut Legal Action, said: "We're pleased we will be able to present our arguments at this hearing and look forward to the judge granting us permission to proceed with a judicial review.
"A judicial review is clearly necessary and we're confident that we have a strong case. The decision by HMRC to let Goldman Sachs off an alleged £10m tax bill must be reversed and the money handed over to the public purse."
Rosa Curling of Leigh Day said: "At this time, when public services are being cut, it is crucial that HMRC ensures all monies owed to them by companies such as Goldman Sachs are paid in full. The rules have to be applied fairly and equally. Goldman Sachs is one of the world's richest banks. It cannot be right that they are let off millions of pounds of tax owed to the UK government."
HMRC said that it could not comment on "ongoing litigation".
At the moment, the case is being taken on a no win no fee arrangement, but should UK Uncut lose, they may have to pay HMRC and Goldman Sachs’ costs. They are asking UK taxpayers to each contribute £1 to the fund and are hoping to collect £20,000. They already have £17,000.
The High Court has allowed a preliminary permission hearing to take place on 13 June.