The tax-avoidance campaign group UK Uncut has won permission from the High Court to pursue a judicial review of a so-called 'sweetheart' deal between Her Majesty's Revenue and Customs and the world's largest investment bank, Goldman Sachs.
Sweetheart deals are struck between organisations and involve offering favourable terms in the interests of longer-term cooperation.
However, the current economic climate, with unemployment high, cuts on public spending and rising taxes has prompted some to look more closely at the deals struck between the Inland Revenue and big businesses.
Mr Justice Simon agreed with UK Uncut's submission that an agreement which allowed Goldman Sachs to skip up to £20m of interest due on tax on unpaid bonuses was potentially unlawful and should face a full judicial review.
Counsel for UK Uncut argued that the HMRC had reached a settlement on NI due on staff bonuses but had allowed them to avoid paying interest on the total amount. The official figure quoted in the case is £8m but some insiders claim the amount could now be much more.
The HMRC had originally taken legal advice that the money could not be collected, but this was later rescinded and HMRC was informed that the tax could be fairly and legally collected. HMRC decided however not to pursue the matter, and it is this decision which UK Uncut are seeking to review.
The HMRC had argued that permitting a judicial review of the case would undermine taxpayer confidentiality which it claims is essential.
Counsel for HMRC argued that the National Audit Office was already preparing a report to Parliament on the Goldman Sachs deal, and other similar controversial deals struck between HMRC and businesses, and that a further review was not necessary.
Ruling in favour of UK Uncut, the judge in the case Mr Justice Simon said: "There is plainly public interest in this matter, and maladministration and legality are separate issues."
Speaking after the judgment, Murray Worthy of UK Uncut said: "We welcome the court's decision that we can take forward the case regarding the alleged sweetheart deal between the HMRC and Goldman Sachs."
Sources:
UK Uncut allowed to challenge Goldman Sachs tax deal (Channel 4 News)
UK Uncut can challenge Goldman Sachs 'sweetheart' tax deal (The Independent)
Related links:
What is judicial review? (FindLaw)
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