This comes from the UK Uncut legal case:
Two things stand out.
First a senior member of the department made a mistake. It's obvious who.
And second it had to be covered up because it was embarrassing.
It's the cover up that's been the problem.
And the question is, to me, was that legal?
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
I’m flabbergasted! This is HMT/HMRC Large Business Strategy laid bare! Well done to all those who helped in exposing this!
The case for an independent probe of these sweetheart deals is now unanswerable. If this is what happened on a £20 million deal, heaven knows what they got up in the four “bespoke” deals they accepted £4.5 billion for.
One word I’ll use back at you – Libel.
Let me explain what this email actually says.
As part of the settlement, HMRC had proposed to recover £X of apparently unpaid NICs. Following that proposal being made, HMRC became aware that their position on the NICs argument was much weaker than they had first thought – they were trying to collect something they had no right to collect.
However, the agreement with Goldman Sachs was already in the pipeline in terms of quantum – so it was agreed that Goldman Sachs wouldn’t fight the NICs recovery (in which they would, in all likelihood, have been successful) and in recognition HMRC would make an interest adjustment. This saved all parties the bother of re-negotiating the basis settlement but preserved the quantum.
Then HMRC internal governance requirements changed and all settlements in excess of £100m had to be reviewed and given the OK by their senior committee. That committee picked up on the fact that, in strictness, HMRC should have dropped the NIC issue and renegotiated the basis of the settlement – they weren’t happy with the workaround even though no tax/NICs were conceded. (HMRC aren’t supposed to do anything with interest unless it’s caused by an unreasonable delay on their part. Interest is due of duties are paid late and that should be the end of the story. I suggest this is what the HRCP committee weren’t happy about).
Also important to note – this means that the HRCP committee also reviewed ALL OTHER ASPECTS of the settlement proposals and found no issue with them.
It also appears that Hartnett took legal advice over this position, following a review by a reputable firm of accountants (who also failed to spot the NICs argument weak spots). That legal advice isn’t presented in the email provided, but its existence is clearly alluded to.
In summary, HMRC may have cut a few corners to expedite a settlement which would (in all likelihood) have been NO BIGGER had they done everything strictly by the book. If anything, although procedurally this was not HMRC’s finest hour, this saved the taxpayer a few bucks in terms of time and admin costs.
Corruption is a serious allegation. There’s no suggestion here that anybody at HMRC at whatever level of authority benefitted personally from this settlement agreement. Absent any solid evidence to the contrary, I would counsel severe caution to anyone throwing the “C” word about.
Remember – the amount that the papers report as being the tax lost in HMRC cases is usually equal to the total tax under consideration – that is to say, the tax HMRC would recover if they were right with all of their arguments. They are, quite clearly, not right with ALL of their arguments… the original tax under consideration by HMRC almost NEVER equates to the amount finally settled upon.
That being said, I don’t have the facts and figures in front of me. Since you haven’t the benefit of the facts & figures either, should we all stop meaningless speculation? And, howsabout waiting for the outcome of UK Uncut’s case before making such inflammatory statements?
I asked a question and said it needed an answer
I think it does need an answer – and see no reason why the IPCC could not give one
The point is a mistake has been conceded – clearly – and some in HMRC wanted to correct it. But the person who made the mistake over-ruled that action to save face, including his own, form which face saving he would clearly benefit. That may not be corruption. I just said it was worth asking if it was. I think that a fair thing to do.
Richard –
My concern about Libel was directed to Arvind, not you.
I agree that if the decision to bypass the HRCP board’s decision and press on with the settlement was made primarily to spare someone’s blushes, then that’s questionable. Is it corrupt? I’m not wholly sure I agree that it is in the case of Dave Hartnett; however, embarrassment may be quite a potent form of political currency so whether or not the same could be said for Mr Osborne is another matter.
Not a matter for me, however – I’m not qualified to judge and I still don’t have all the information!
“I asked a question and said it needed an answer”
No you didn’t! You said
“I think there’s a technical term for an e-mail like this, but I’m too polite to use it”.
No question there Richard. And no, you’re not too polite; so what is your reason?
I was referring to my IPCC one – sorry
Re the email – this was the mail of a frightened man – isn’t that obvious?
Yes indeed, because I would suggest he “dropped the ball” in a big way!