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

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Will Euroscepticism prove an unbeatable advantage in the Conservative leadership race?

Conservative members who are eager for Brexit are still searching for a heavyweight champion - and they could yet inherit the earth.

Put your money on Liam Fox? The former Defence Secretary has been given a boost by the news that ConservativeHome’s rolling survey of party members preferences for the next Conservative leader. Jeremy Wilson at BusinessInsider and James Millar at the Sunday Post have both tipped Fox for the top job.

Are they right? The expectation among Conservative MPs is that there will be several candidates from the Tory right: Dominic Raab, Priti Patel and potentially Owen Paterson could all be candidates, while Boris Johnson, in the words of one: “rides both horses – is he the candidate of the left, of the right, or both?”

MPs will whittle down the field of candidates to a top two, who will then be voted on by the membership.  (As Graham Brady, chair of the 1922 Committee, notes in his interview with my colleague George Eaton, Conservative MPs could choose to offer a wider field if they so desired, but would be unlikely to surrender more power to party activists.)

The extreme likelihood is that that contest will be between two candidates: George Osborne and not-George Osborne.  “We know that the Chancellor has a bye to the final,” one minister observes, “But once you’re in the final – well, then it’s anyone’s game.”

Could “not-George Osborne” be Liam Fox? Well, the difficulty, as one MP observes, is we don’t really know what the Conservative leadership election is about:

“We don’t even know what the questions are to which the candidates will attempt to present themselves as the answer. Usually, that question would be: who can win us the election? But now that Labour have Corbyn, that question is taken care of.”

So what’s the question that MPs will be asking? We simply don’t know – and it may be that they come to a very different conclusion to their members, just as in 2001, when Ken Clarke won among MPs – before being defeated in a landslide by Conservative activists.

Much depends not only on the outcome of the European referendum, but also on its conduct. If the contest is particularly bruising, it may be that MPs are looking for a candidate who will “heal and settle”, in the words of one. That would disadvantage Fox, who will likely be a combative presence in the European referendum, and could benefit Boris Johnson, who, as one MP put it, “rides both horses” and will be less intimately linked with the referendum and its outcome than Osborne.

But equally, it could be that Euroscepticism proves to be a less powerful card than we currently expect. Ignoring the not inconsiderable organisational hurdles that have to be cleared to beat Theresa May, Boris Johnson, and potentially any or all of the “next generation” of Sajid Javid, Nicky Morgan or Stephen Crabb, we simply don’t know what the reaction of Conservative members to the In-Out referendum will be.

Firstly, there’s a non-trivial possibility that Leave could still win, despite its difficulties at centre-forward. The incentive to “reward” an Outer will be smaller. But if Britain votes to Remain – and if that vote is seen by Conservative members as the result of “dirty tricks” by the Conservative leadership – it could be that many members, far from sticking around for another three to four years to vote in the election, simply decide to leave. The last time that Cameron went against the dearest instincts of many of his party grassroots, the result was victory for the Prime Minister – and an activist base that, as the result of defections to Ukip and cancelled membership fees, is more socially liberal and more sympathetic to Cameron than it was before. Don’t forget that, for all the worry about “entryism” in the Labour leadership, it was “exitism” – of Labour members who supported David Miliband and liked the New Labour years  - that shifted that party towards Jeremy Corbyn.

It could be that if – as Brady predicts in this week’s New Statesman – the final two is an Inner and an Outer, the Eurosceptic candidate finds that the members who might have backed them are simply no longer around.

It comes back to the biggest known unknown in the race to succeed Cameron: Conservative members. For the first time in British political history, a Prime Minister will be chosen, not by MPs with an electoral mandate of their own or by voters at a general election but by an entirelyself-selecting group: party members. And we simply don't know enough about what they feel - yet. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.