Campaign group UK Uncut Legal Action has moved one step closer to taking HMRC to court over the sweetheart tax deal it made with Goldman Sachs in December 2010
The activists are hoping that the High Court will ultimately quash the deal under which HMRC dropped a claim for £10m in interest payments on money that the bank owed in National Insurance contributions on staff bonuses.
They are seeking judicial review of the agreement and, according to The Guardian, the court has now granted them a preliminary permission hearing, which will take place on 13 June.
The money had been tied up in a tax avoidance scheme based in the British Virgin Islands (BVI). During the 1990s Goldman set up a company there which claimed to employ all of Goldman’s London bankers and second them to the bank.
Along with 21 other investment banks and other businesses, it purchased a tax avoidance scheme, known as an employee benefit trust (EBT), through which it indirectly invested bonuses in elaborate share option schemes.
In 2005, HMRC persuaded the UK courts that EBTs were illegitimate tax avoidance devices and all the businesses – bar Goldman Sachs – paid up. The bank continued to argue for the legitimacy of the scheme until 2010 when a judge decided that the bankers’ true employer was not the BVI company.
Details of the HMRC sweetheart deal emerged after documents were leaked to Private Eye and The Guardian.
When questioned by the Public Accounts Committee in October last year, HMRC permanent secretary for tax Dave Hartnett admitted that a mistake had been made in reaching the deal.
UK Uncut was set up to challenge the coalition government’s “unjust and unnecessary cuts programme” through the UK courts.
Director Tim Street told The Guardian: “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.”
Julia Irvine
They are seeking judicial review of the agreement and, according to The Guardian, the court has now granted them a preliminary permission hearing, which will take place on 13 June.
The money had been tied up in a tax avoidance scheme based in the British Virgin Islands (BVI). During the 1990s Goldman set up a company there which claimed to employ all of Goldman’s London bankers and second them to the bank.
Along with 21 other investment banks and other businesses, it purchased a tax avoidance scheme, known as an employee benefit trust (EBT), through which it indirectly invested bonuses in elaborate share option schemes.
In 2005, HMRC persuaded the UK courts that EBTs were illegitimate tax avoidance devices and all the businesses – bar Goldman Sachs – paid up. The bank continued to argue for the legitimacy of the scheme until 2010 when a judge decided that the bankers’ true employer was not the BVI company.
Details of the HMRC sweetheart deal emerged after documents were leaked to Private Eye and The Guardian.
When questioned by the Public Accounts Committee in October last year, HMRC permanent secretary for tax Dave Hartnett admitted that a mistake had been made in reaching the deal.
UK Uncut was set up to challenge the coalition government’s “unjust and unnecessary cuts programme” through the UK courts.
Director Tim Street told The Guardian: “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.”
Julia Irvine
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