UK Uncut legal case exposes political embarrassment behind Goldman’s tax deal

Press Release: For Immediate Release
Contact: 07793031984 | 07591 992 825 | 07425 261 383

Campaigners from UK Uncut today claimed a ‘major victory’ as a High Court judge ruled that embarrassment to George Osborne was a major factor in letting Goldman Sachs off up to £20 million in tax. The judgment in the legal challenge, brought by UK Uncut Legal Action against a ‘sweetheart deal’ between HMRC and Goldman Sachs in 2010, found that the deal was lawful.

The High Court judgment by Mr Justice Nicol found that “Mr Hartnett [then permanent secretary for tax, HMRC’s top tax official] took into account the potential embarrassment to the Chancellor of the Exchequer if Goldman Sachs were to withdraw from the tax code. HMRC accepts that was an irrelevant consideration and should have not featured in his decision making process.”

The court also criticised HMRC’s catalogue of errors in failing to collect the tax owed. The judgment concludes; “The settlement with Goldman Sachs was not a glorious episode in the history of the Revenue. The HMRC officials who negotiated it had not been briefed by the lawyers […], they relied on their belief or recollection that there was a barrier to the recovery of interest [… and] the officials who negotiated the agreement overlooked the need for approval [of the deal].”

In declaring the deal lawful, the court found that HMRC’s top officials were legally allowed to take into account the bank’s threats to withdraw from the Code of Practice on Taxation for Banks in assessing whether to pursue Goldman Sachs for the tax owed.

Goldman Sachs’ support for the Tax Code had been announced by the Chancellor as part of a key policy to “ensure banks pay their fair share”. In evidence disclosed during the case it emerged that the investment bank was threatening to pull out of the Tax Code if it was forced to pay the £20 million, owed in interest from a failed tax avoidance scheme the bank had used in the 1990s. Following Goldman Sachs’ threats, HMRC’s top officials overruled their own internal review board and decided not to pursue the bank for the tax owed.

Responding to the court judgment, Anna Walker, Campaigns Director of UK Uncut Legal Action said:

“Obviously while we are deeply disappointed that this deal has not been declared unlawful, the judge’s ruling that top HMRC officials played politics with major tax deals to protect Osborne’s reputation is a major victory in exposing the truth behind these secret deals.”

“Despite not having won the case today we still feel that this judgment has demonstrated that the government is making a political choice to cut legal aid, public services and the welfare system, rather than take action to make corporate giants like Goldman Sachs, Amazon or Google pay their fair share of tax.

“This case has exposed the lengths the government will go to look tough on tax avoidance and has been vital in holding the government to account for its shameful actions.”


Notes to editors

For more information or interviews with the Directors of UK Uncut Legal Action call 07415 063 231 and 07591 992 825 and 07425 261 383 or email:
David Standard at Leigh Day on 07540 332717

The Code of Practice on Taxation for Banks is a non-binding and voluntary statement of principles. In November 2010 George Osborne announced that the top 15 banks had adopted the code “to ensure banks pay their fair share”. For more information see

UK Uncut Legal Action has no plans to appeal the judgment at this stage, and is considering what their next steps will be in taking action against the government’s cuts.

Key documents

Full text of the judgment

The history of the Goldman Sachs deal

Timeline of the case

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