HMRC backed Goldman for fear of embarrassment, court hears

 
Tim Wallace
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THE TAXMAN feared pushing for interest payments from Goldman Sachs could lead to embarrassment for the UK if the investment bank pulled out of a new tax code, the High Court heard yesterday.

HM Revenue and Customs is accused of wrongly agreeing to let the bank off a £20m interest payment incurred over the course of a lengthy legal row.

“Goldman Sachs had been involved in tax avoidance in the past and we regarded their signing of the Code as a valuable step in securing improved tax behaviour from them,” said ex-HMRC boss in Dave Hartnett written evidence.

“This would have been under threat had we reneged on the settlement (they said they would withdraw from the Code if HMRC reopened the settlement).”

Campaign group UK Uncut, which brought the action, said the deal made a mockery of efforts to make banks pay more tax.

“This shows the lengths that the government will go to in order to preserve the public perception that government is getting tough on tax avoidance,” said campaigns director Anna Walker.