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Campaign group, UK Uncut Legal Action brought HMRC to court over a settlement deal made in 2010, arguing that it was unlawful.
 

The case related to a deal between Goldman Sachs and the UK tax authority to end a dispute over a now banned tax avoidance scheme involving routing bonus payments to UK staff through an offshore subsidiary.

 

After meeting with HMRC to arrange a ‘bespoke settlement’ in November 2010, Goldman Sachs agreed to pay the NI contributions it had avoided through the scheme but HMRC decided that, for technical reasons, it could not collect the interest that had accrued during the five-year conflict.

 

 

High Court Judge, Andrew Nicol ruled in favour of HMRC but wrote that the settlement was ‘not a glorious episode in the history of the Revenue’, before listing a catalogue of errors HMRC made in failing to collect the outstanding tax.

 

The judge also concluded that potential embarrassment to George Osborne played a part in HMRC’s decision to let Goldman Sachs off with part of its bill.

 

 

‘Exposing the truth behind these secret deals’

UK Uncut Legal Action said it was disappointed by the ruling but felt the case helped to expose how HMRC deals with big businesses.

 

Campaigns director of UK Uncut Legal Action, 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.’

‘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,’ she added.

 

 

HMRC welcomed the ruling and said that it has changed its practices since it made the agreement with Goldman Sachs in 2010.

 ‘The High Court's comprehensive dismissal of UK Uncut's claim puts to rest the fallacy that HMRC is soft on large businesses,’ said Jim Harra, HMRC's director general for business tax.

‘The High Court's judgement 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,’ he added.

 

A report by the National Audit Office declared that the deal between Goldman Sachs and HMRC was ‘reasonable’.