Lawyers acting for a group seeking to challenge a settlement reached between HMRC and Goldman Sachs have told the department that its ‘ongoing delay’ in dealing with the claim is ‘unacceptable’.
Meanwhile, the National Audit Office is continuing to looking for tax and legal expertise to assist its further investigation into HMRC settlements with large businesses, a spokesman told Tax Journal after a newspaper report indicated that a senior judge would lead the inquiry.
The Independent reported yesterday that a senior judge was ‘expected to be given the power to examine the private accounts of Goldman Sachs and Vodafone to establish whether senior inspectors wrongly "let them off" multi-million-pound tax bills’.
The paper quoted Margaret Hodge, chairman of the Commons Public Accounts Committe (PAC), as saying: ‘This judge-led review will be looking at whether the deals that were done were reasonable. It will examine whether they took proper legal advice and whether HMRC met their own protocols.’
The Times reported earlier this month that the NAO was understood to be hiring senior judges to investigate whether the disputes were properly handled.
But the NAO spokesman told Tax Journal that no appointments had been made, and the NAO was continuing to ‘scope’ the study, which would be led by the NAO.
Leigh Day & Co, a London-based law firm, wrote to HMRC at the end of October on behalf of UK Uncut Legal Action, a group inspired by UK Uncut, threatening a legal challenge over an alleged 'sweetheart tax deal’ with Goldman Sachs. The firm sent a ‘letter before claim’ to HMRC, allowing the department 14 days to ‘reconsider’ the settlement.
Leigh Day & Co said last night that HMRC had twice requested additional time to respond to the letter.
‘[HMRC] now states that it cannot respond until 29 November 2011, six weeks after it was first notified about the claim. It states that it needs more time to “continue … enquiries into the issues raised”. The normal time limit in judicial review proceedings is 14 days,’ the firm said.
Richard Stein, a Partner at Leigh Day & Co, said: ‘We believe that HMRC has had plenty of time to make “enquiries” about the Goldman Sachs deal, particularly given its requirement to give evidence to the [Public Accounts] Select Committee about the issue. We do not think their ongoing delay is acceptable.’
An HMRC spokesman told Tax Journal today: ‘We have asked for an extension to 29 November to enable us to continue our enquiries into all the issues raised.’
Goldman Sachs has declined to comment on a mistake made by an HMRC official that resulted in no interest being charged on unpaid tax. HMRC’s Permanent Secretary for Tax, Dave Hartnett, has admitted that the department wrongly believed that there was a ‘legal impediment’ to charging Goldman interest.
Amyas Morse, the head of the NAO, told the PAC last month that the loss to the revenue would have been between £5m and £8m. His office would seek advice from tax experts to support further investigation into HMRC handling of tax disputes and would report to MPs ‘in a private session’.
The PAC has examined Hartnett and other HMRC witnesses three times in the past two months in connection with HMRC’s settlements with Goldman and Vodafone.
Both Vodafone and HMRC have denied repeatedly that a settlement reached last year in the sum of £1.25bn saved Vodafone billions of pounds. The settlement was agreed ‘after a full and rigorous examination of the facts and circumstances by HMRC, followed by intensive and tough negotiations about the complex legal issues involved’, a Vodafone spokesman told Tax Journal 12 months ago.
At the PAC hearing earlier this month, Anthony Inglese, HMRC’s General Counsel, initially declined to discuss with MPs a note – leaked to The Guardian – of a meeting held last December at which concerns were expressed about the Goldman settlement. The note was legally privileged, Inglese said.
Inglese told the PAC that a judicial review was ‘being brought’ against HMRC. ‘We have had the pre-action protocol letter by a pressure group and we are now looking at our response.’
The PAC later examined Inglese on Oath. He said he had advised Hartnett that ‘it was open to the department to go back and revisit the settlement, or that it was open to the department to carry on and accept the mistake’.
This was, he said, the subject of a judicial review. ‘I am doing my absolute best, within my constraints of legal privilege, to give you the headline of my advice. The headline was that we could go back and reopen,’ he said.
Richard Bacon, the Conservative MP, later asked Hartnett: ‘And once the mistake was discovered, you were given legal advice – Mr Inglese has basically said this – that there were a number of options, one of which was to unwind the agreement that had been reached and, indeed, to charge interest after all, and another option was to let matters stand. That’s correct, isn’t it?’
‘Yes,’ Hartnett said.
‘You didn’t unwind the agreement, but you let matters stand. That’s right, isn’t it?’ Bacon asked.
‘Yes,’ Hartnett replied.
Hartnett wrote to the PAC last month setting out why HMRC considered that strict rules on taxpayer confidentiality prevented disclosure to MPs of detailed information concerning the settlements.
Goldman Sachs declined to comment when contacted yesterday.
Lawyers acting for a group seeking to challenge a settlement reached between HMRC and Goldman Sachs have told the department that its ‘ongoing delay’ in dealing with the claim is ‘unacceptable’.
Meanwhile, the National Audit Office is continuing to looking for tax and legal expertise to assist its further investigation into HMRC settlements with large businesses, a spokesman told Tax Journal after a newspaper report indicated that a senior judge would lead the inquiry.
The Independent reported yesterday that a senior judge was ‘expected to be given the power to examine the private accounts of Goldman Sachs and Vodafone to establish whether senior inspectors wrongly "let them off" multi-million-pound tax bills’.
The paper quoted Margaret Hodge, chairman of the Commons Public Accounts Committe (PAC), as saying: ‘This judge-led review will be looking at whether the deals that were done were reasonable. It will examine whether they took proper legal advice and whether HMRC met their own protocols.’
The Times reported earlier this month that the NAO was understood to be hiring senior judges to investigate whether the disputes were properly handled.
But the NAO spokesman told Tax Journal that no appointments had been made, and the NAO was continuing to ‘scope’ the study, which would be led by the NAO.
Leigh Day & Co, a London-based law firm, wrote to HMRC at the end of October on behalf of UK Uncut Legal Action, a group inspired by UK Uncut, threatening a legal challenge over an alleged 'sweetheart tax deal’ with Goldman Sachs. The firm sent a ‘letter before claim’ to HMRC, allowing the department 14 days to ‘reconsider’ the settlement.
Leigh Day & Co said last night that HMRC had twice requested additional time to respond to the letter.
‘[HMRC] now states that it cannot respond until 29 November 2011, six weeks after it was first notified about the claim. It states that it needs more time to “continue … enquiries into the issues raised”. The normal time limit in judicial review proceedings is 14 days,’ the firm said.
Richard Stein, a Partner at Leigh Day & Co, said: ‘We believe that HMRC has had plenty of time to make “enquiries” about the Goldman Sachs deal, particularly given its requirement to give evidence to the [Public Accounts] Select Committee about the issue. We do not think their ongoing delay is acceptable.’
An HMRC spokesman told Tax Journal today: ‘We have asked for an extension to 29 November to enable us to continue our enquiries into all the issues raised.’
Goldman Sachs has declined to comment on a mistake made by an HMRC official that resulted in no interest being charged on unpaid tax. HMRC’s Permanent Secretary for Tax, Dave Hartnett, has admitted that the department wrongly believed that there was a ‘legal impediment’ to charging Goldman interest.
Amyas Morse, the head of the NAO, told the PAC last month that the loss to the revenue would have been between £5m and £8m. His office would seek advice from tax experts to support further investigation into HMRC handling of tax disputes and would report to MPs ‘in a private session’.
The PAC has examined Hartnett and other HMRC witnesses three times in the past two months in connection with HMRC’s settlements with Goldman and Vodafone.
Both Vodafone and HMRC have denied repeatedly that a settlement reached last year in the sum of £1.25bn saved Vodafone billions of pounds. The settlement was agreed ‘after a full and rigorous examination of the facts and circumstances by HMRC, followed by intensive and tough negotiations about the complex legal issues involved’, a Vodafone spokesman told Tax Journal 12 months ago.
At the PAC hearing earlier this month, Anthony Inglese, HMRC’s General Counsel, initially declined to discuss with MPs a note – leaked to The Guardian – of a meeting held last December at which concerns were expressed about the Goldman settlement. The note was legally privileged, Inglese said.
Inglese told the PAC that a judicial review was ‘being brought’ against HMRC. ‘We have had the pre-action protocol letter by a pressure group and we are now looking at our response.’
The PAC later examined Inglese on Oath. He said he had advised Hartnett that ‘it was open to the department to go back and revisit the settlement, or that it was open to the department to carry on and accept the mistake’.
This was, he said, the subject of a judicial review. ‘I am doing my absolute best, within my constraints of legal privilege, to give you the headline of my advice. The headline was that we could go back and reopen,’ he said.
Richard Bacon, the Conservative MP, later asked Hartnett: ‘And once the mistake was discovered, you were given legal advice – Mr Inglese has basically said this – that there were a number of options, one of which was to unwind the agreement that had been reached and, indeed, to charge interest after all, and another option was to let matters stand. That’s correct, isn’t it?’
‘Yes,’ Hartnett said.
‘You didn’t unwind the agreement, but you let matters stand. That’s right, isn’t it?’ Bacon asked.
‘Yes,’ Hartnett replied.
Hartnett wrote to the PAC last month setting out why HMRC considered that strict rules on taxpayer confidentiality prevented disclosure to MPs of detailed information concerning the settlements.
Goldman Sachs declined to comment when contacted yesterday.
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