UK Uncut Legal Action starts legal proceedings against HMRC over Goldman Sachs tax bill

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UK Uncut Legal Action have announced this morning that they will issue legal proceedings against HMRC on Thursday 22 Dec. Their press release says:
Adding to the parliamentary pressure on HMRC this week from the Public Accounts Committee, UK Uncut Legal Action, an NGO inspired by the anti-cuts direct action group UK Uncut announced today it will issue proceedings in the High Court on Thursday. The campaigning group made the decision to go forward with the case after receiving what they term a 'dismissive' response from HMRC to letters from their lawyers demanding the alleged sweetheart deal agreed between David Hartnett and Goldman Sachs is quashed.

This announcement from UK Uncut Legal Action comes as the Public Accounts Committee today releases a report into the dealings between large companies and the HMRC, and the way that the tax office has handled high value tax settlements with companies including Vodafone and Goldman Sachs. The report is expected to trigger the launch of the National Audit Office’s investigation of 10 particular tax disputes by the retired judge Sir Andrew Park.

UK Uncut Legal Action have welcomed scrutiny into tax deals from both the National Audit Office and the Public Accounts Committee reports but claim the legal action they are taking is the only mechanism that can result in a declaration that the Goldman Sachs tax deal was unlawful, as well as returning £20 million to the public purse.

Leigh Day & Co who are acting for UK Uncut Legal Action, confirmed in a letter sent in October that if the settlement reached between HMRC and Goldman Sachs, allegedly allowing the company off £20million worth of tax owed, was not reversed it would issue these proceedings which seek specific disclosure for all internal documents regarding the process by which agreement was reached.

Richard Stein from Leigh Day & Co said: “We wrote to the HMRC in October asking them to quash the deal and reclaim the millions unpaid in taxes from one of the world’s richest banks but received no response. We chased again in November and they claimed they needed more time.

"They have now replied with what we feel is an extremely weak argument as to why this decision cannot be reversed, therefore, we will now progress this legal action and issue proceedings in the High Court.”

UK Uncut Legal Action has also launched a public fundraising appeal, which has raised nearly £10,000 in two weeks with over two thousand people making small donations. This represents what the campaign group is calling a ’people’s court case’ against HMRC. Support for this legal action has also been voiced by over 3000 individuals from the public and leading anti-poverty NGOs, MPs and Unions, such as Unite, PCS, GMB, Compass, and the Tax Justice Network, who have signed onto a UK Uncut Legal Action statement which says: "It is undeniably in the public interest that this important case should go through the UK courts in order to ensure transparency, accountability and fairness."

Tim Street, director of UK Uncut Legal Action said:

“There is overwhelming public support from Unions, NGOs, MPs and thousands of ordinary people who want to see this dodgy tax deal challenged in the courts. It shows the deep level of outrage that people feel over state sanctioned tax dodging by big business, while government destroys public services that ordinary people rely on, saying that there is no money."

He continued, “It shows that the government is making a political choice to turn a blind eye to tax dodging- which loses the public purse £25bn billion a year. The government is slashing public services and the support for the poorest instead of clamping down on rich tax dodgers. This cannot be allowed to continue. Dave Hartnett’s retirement is welcome news for campaigners but HMRC needs a massive culture change to stop special treatment for corporations and secret unlawful handshake deals”

I think this is welcome action, and is important to ensure faith is restored in HMRC. Unless they are challenged and required to recreate the right balance in the management of tax affairs then there will undoubtedly be ongoing concerns. If this action puts pressure on HMRC to address those concerns then it has to be welcome.