Goldman Sachs have £20m of our money, but we're on the road to getting it back

HMRC's sweetheart tax deal with Goldman Sachs must be declared unlawful

Last Wednesday we were delighted when a High Court judge declared that we will be allowed to take forward our case against HMRC over its decision to let banking giant Goldman Sachs off of up to £20m in interest on an unpaid tax bill. The banking giant has owed this sum since December 2010 and we want HMRC to correct their error and make Goldman Sachs pay their debt as soon as possible so that it can be invested in our vital public services at this time of unprecedented spending cuts.

Our aim now is to have the High Court declare that the agreement reached by HMRC with Goldman Sachs was unlawful. We also want the court to order HMRC to take steps to reopen the agreement it reached with Goldman Sachs about the interest owed and seek to recover that money.

Importantly, the day after we secured our review of HMRC's "sweetheart" deal with Goldman Sachs, the National Audit Office (NAO) published a report on how HMRC settled five large tax disputes with big business, each of these being examined by retired tax judge Sir Andrew Park. We believe that, while the report acknowledges some failures of decision-making and governance in the department, it raises far more questions than it answers.

For example, the five companies in question remain unnamed, so that the truth about these huge tax deals continues to be veiled behind HMRC’s claims of taxpayer secrecy for the powerful businesses in question.

Park also judges the merits of each of the five tax deals on grounds of "reasonableness", finding that each settlement was "reasonable". Crucially, however, Park does not – and cannot – make a judgment on whether the settlements were legal.

The report does appear to cover the Goldman Sachs dispute (understood to be "Company E") and gives some indication of why HMRC chose not to collect the unpaid tax owed to it.

Previously, HMRC's outgoing tax chief, Dave Hartnett – who is understood to have shaken hands with Goldman Sachs on the deal – admitted that he "made a mistake" for which he was "entirely responsible." However, Park finds that HMRC’s decision not to charge interest on Company E’s unpaid tax bill wasn't a mistake but a "deliberate decision" and "made sense in the context of reaching a settlement on all the issues under consideration" with the company. The problem with package deals like this is that they mainly benefit the interests of corporations, which want to minimise their tax bills, and enfeeble HMRC's ability to enforce its own rules and raise the necessary revenue.

Park outlines how the department's own "High Risk Corporates Programme Board" rejected the decision waiving Goldman Sachs interest on their tax bill, but that HMRC commissioners (which included Hartnett) decided to approve the settlement anyway. No explanation was given as to why the commissioners took this course of action at the time and no reasons were recorded until three months later. Even now those reasons remain secret.

Yet somehow Park still concludes that HMRC’s settlement with "Company E" was "reasonable". This is despite Park himself affirming that there was "no legal barrier to charging interest" on the company’s outstanding tax bill and the fact that HMRC's own rules prohibit it from making package deals with businesses.

Given the clear gaps and omissions in the NAO report, it remains vital that our case against HMRC goes ahead, to judge whether the deal with Goldman Sachs was legal, and to expose the truth behind this and other deals as far as possible. It is also important that the Public Accounts Committee follows up its December 2011 report concerning tax disputes in order to challenge and ultimately end the "cosy" relationship between HMRC and big business that it identified.

The public interest in these matters is clear – people have a right to know why a multi-billion pound investment bank and other corporations appear to have been let off the tax they owe while vital public services are being cut. The government now has a choice to make. It can clamp down on the billions of pounds worth of tax avoided by big business or continue making ordinary people pay for the economic crisis with their jobs and pensions.

The entrance to Goldman Sach's office in London. Photograph: Getty Images

Tim Street is the director of UK Uncut Legal Action

Getty Images.
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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.