Today's hearing brought by UK Uncut is bringing out serious and new evidence on HMRC's dealings with Goldman Sachs, especially with regard to the evidence from Dave Hartnett. Some of this appears to conflict with itself, more with what has been said to parliament.
Is this a serious issue given the sums involved? I think so, and I also think there is potentially something that can be done about it. The Independent Police Complaints Commission can address issues arising in HMRC. As they say on their web site:
Of course most of these are completely irrelevant to this matter.
But is it corrupt to, as a Commissioner of HMRC, over-rule decisions made elsewhere in the department to save embarrassment to yourself when there is a direct resulting loss of revenue? After all, avoiding serious embarrassment is a personal gain, secured here by a personal decision at cost to the Exchequer.
I do not know is the honest answer. But it seems to me that the IPCC have a case to look at.
UPDATE AT 14.40:
Corruption in this context could either be theft, which seems inappropriate to consider in this case as there is no evidence I can see of it, or it could be fraud. It's worth noting section 4 of the Fraud Act 2006:
Clearly a Commissioner of HMRC meets the criteria of part 1(a).
I do not know the answer to part 1 (b). That is why I have said the IPCC may wish to look at this issue.
I do think it possible that saving embarrassment can constitute a gain in part 1(c). I also think it possible not pursuing a negotiation is to expose an organisation to loss, and section 2 makes that clear.
Again, I make no conclusion, at all. I am saying the IPCC could be asked for an opinion.
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“But it seems to me that the IPCC have a case to look at.”
Why?
I think waiving a debt to save personal face and over-ruling HMRC procedures to do so could meet a definition of corruption
But as I say, that’s down to them to decide, but I think they should be asked to do so
Is the situation not that:
– HMRC made a mistake because they thought the interest was probably not recoverable and so agreed to accept only the amount of the NI;
– They then realised they should have insisted on the interest too but had already made the offer;
– Hartnett decided that to renege on an offer would be a bad thing for HMRC
The question is, was it reasonable to suppose that reneging on the offer to get the interest would end up costing HMRC more than the amount of the interest in the long run? HMRC has precious little trust as it is, and eroding that further could be seen to be a bad thing, especially if Goldman Sachs were able to argue that HMRC were bound by the original offer anyway.
A complicated question – I don’t really have a firm view, and I’ll be interested to see the answer the court comes up with.
I very much doubt that the overall view and nuanced judgements would be taken into consideration on this issue
There was a debt
HMRC staff thought it should be pursued
It wasn’t
Now that doesn’t mean there is an issue to investigate -I don’t know – but I do not think the Banking Code is a factor in it either
@Pellinor,
They made “a mistake” because the lawyers working on the case, who had secured the interest, were not informed about this settlement. This account about “a mistake” has only come up because nobody has seen all the papers (apart from probably the NAO that were committed to the cover-up as much as HMRC). UK Uncut did not see even the report prepared for the NAO by Sir Andrew Park, let alone the relevant HMRC papers because of the limited nature of judicial review. The PAC saw even less than UK Uncut (which says a lot about how these deals undermine our Parliamentary democracy). A criminal investigation will get to the full facts. Mounting a defence on the basis of HMRC’s changing accounts is simply desperate. What is wrong with a proper investigation to establish the facts?
If not corrupt, then I would suggest that Mr Hartnett appears to have acted in a very cavalier and high handed way. I appreciate that he may have decided to waive the penalties.
However waiving/not charging the interest looks like a step too far. I would have thought the phrase “commercial restitution” should be ringing like bell in his head given that he joined HMRC in 1976!
http://www.hmrc.gov.uk/manuals/emmanual/em6006.htm
Interest has been charged on NIC for some years now and Mr Hartnett may be forgiven perhaps for not being technically up to date, but that does not excuse him for not taking advice first given the very large sums of money involved and the need to ensure HMRC are seen to be adopting an even-handed approach.
I’m sure there are other employers that have paid on NIC in not dissimilar circumstances! I bet they would have liked this waived!
What I dislike is the thought that Goldman might have believed they could apply leverage to their position. HMRC being “commercial” is laudable, but not if it undermines its ability to enforce the rule of law.
I have comments from those within HMRC relayed to me that the behaviour of a certain firm of lawyers in negotiations is such that it is more akin to “the Goodfellas” than that of a professional firm! I know it is only hearsay, but if there is any truth in this then this leaves a lot to be desired.
I too will be very interested to learn the outcome and personally, I support the action that UK Uncut have taken!