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Will UK Uncut launch High Court legal action against HMRC?

Will UK Uncut launch High Court legal action against HMRC?

Accountants for contractors might be interested to learn that last Friday, UK Uncut, the anti-austerity action group, threatened to take legal action over the deal HMRC came to with Goldman Sachs over the investment bank’s unpaid National Insurance contributions.

After recently calling for the resignation of Dave Hartnett, the permanent secretary for tax, the group has now said it is considering applying to the High Court for a ruling on the NI deal. UK Uncut says HMRC acted unlawfully by departing from the procedures set down for governance.

Goldman Sachs, along with a number of other companies, set up employee benefit trusts to provide loans to their employees. The loans do not need to be repaid, but in 2005 the courts ruled that National Insurance had to be paid on these loans. 21 companies settled up, but Goldman Sachs challenged the ruling. The bank was told that interest would be levied on the overdue amount while the dispute continued.

At the end of last year, Hartnett made a deal with the bank that meant it was not liable for the interest. According to Amyas Morse, the head of the National Audit Office, the loss of revenue cost the Treasury as much as £8 million. Hartnett defended his actions by saying HMRC had mistakenly believed it would not be able to recoup the full balance.

UK Uncut has posted a blog saying that if the mistake was genuine, it can be put right and Goldman Sachs should settle the bill. The Group says it expects to see this happen within a couple of weeks or it will take the matter to court. Dave Hartnett acted unlawfully when he made the handshake agreement because he didn’t follow the procedures laid down by HMRC, the blog concluded.

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Image: Graffiti by JapanBlack

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