9 January 2013
The legal action against HMRC on behalf of UK Uncut Legal Action has been included in The Lawyer magazine’s Top 20 cases in 2013, their selection of ‘the bust-ups to watch’ this year.
UK Uncut Legal action is an NGO inspired by the anti-cuts direct action group UK Uncut. It issued formal judicial review proceedings against HMRC in December 2011 and the substantive hearing into its claim is due to take place on 2 May 2013.
UK Uncut Legal Action are taking the legal action following a settlement that they believe was reached between HMRC and Goldman Sachs in December 2010, which could have saved the London based bank approximately £20m including interest on unpaid taxes in an alleged ‘sweetheart deal’ agreed between the then Head of HMRC and the bank.
The campaign group allege that in the 1990s, Goldman Sachs set up a company in the British Virgin Islands called Goldman Sachs Services Ltd. This company appears to have been designed to conceal the amount the bank was paying its bankers in bonuses, and thus reduce the amount of national insurance owed by them.
By 2005, HMRC had demonstrated that this scheme, known as employee benefit trust, was an illegitimate tax avoidance device. So in July 2011, HMRC's own QC, Malcolm Gammie, gave broadly positive advice that HMRC should therefore be able to recover all monies owed to it by the company.
Despite this strong advice from HMRC’s own lawyers, Dave Hartnett, the boss at HMRC, allegedly met Goldman's tax director, Mike Housden, and shook hands on a 'sweetheart deal' which let the bank off £20 million tax owed.
from Leigh Day said: "We believe the agreement reached with Goldman Sachs was in direct contradiction to HMRC’s own policies and strategies.
“We wrote to the HMRC in October 2011 asking them to quash the deal and reclaim the millions unpaid in taxes from one of the world’s richest banks but received no response. We chased again in November 2011 and they claimed they needed more time.
"They finally replied in December 2011 with what we felt was an extremely weak argument as to why the agreement cannot be reversed, therefore, the legal action has progressed and we look forward to a two day hearing in the High Court later this year.”
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