October 11, 2011 8:51 pm

MPs set to grill tax chief over Goldman deal

The UK’s top tax official is likely to be questioned by MPs today over leaked documents concerning the settlement of a tax dispute with Goldman Sachs.

Dave Hartnett, permanent secretary for tax at Revenue & Customs, shook hands on a settlement last December that apparently waived a charge for interest, according to documents leaked to Private Eye magazine and published by the Guardian.

According to the minutes, Anthony Inglese, the Revenue’s general counsel, said he would always want to assist Dave Hartnett but not if this were “unconscionable”. The minutes said: “He referred to the difficulty all those present at the meeting were having in justifying a settlement without an interest element.”

Revenue & Customs said: “The picture Private Eye presents is incomplete and, therefore, fundamentally flawed but taxpayer confidentiality prevents us from correcting the story in detail. Dave Hartnett’s long career in the tax service has been built on ensuring the right tax is paid by large businesses and individuals alike and HMRC [Revenue & Customs] does not do ‘sweetheart’ deals.”

Goldman Sachs declined to comment.

The settlement follows a dispute over national insurance contributions that featured a scheme involving Goldman Sachs Services, an associated company in the British Virgin Islands. In 2005, other banks that used the scheme settled with the Revenue. In 2010, David Williams, a tribunal judge, said the British Virgin Islands company was “a way of keeping information about the GS accounts and payroll out of the public domain and confidential”.

The Revenue minutes published on Tuesday said that Goldman Sachs had incurred “no additional penalty for having resisted for five more years including . . . raking every conceivable point in the tribunal”.

Mr Hartnett is due to be questioned today about the Revenue’s report by the Commons’ public accounts committee.

This year, the National Audit Office identified two cases where there had been governance errors in the settlement of disputes. In September, Mr Hartnett told MPs his legal advice prevented him from commenting on speculation that one was Goldman Sachs.

Another leaked document published on Tuesday, dated June 2009, reported the Revenue’s legal advice was that there was no absolute bar on disclosure of taxpayer information to the public accounts committee. But disclosure would be at the Revenue’s discretion and wrongful disclosure would be a criminal offence. The memo recommended responding to a challenge by Edward Leigh, then the committee chairman, over the Revenue’s refusal to disclose identifiable taxpayer information by maintaining the existing policy. This meant that such information would be disclosed only in “very exceptional circumstances”.

Last month, Jesse Norman, an MP on the Commons Treasury committee, pressed Mr Hartnett to discuss the Goldman Sachs deal but Mr Hartnett said the Revenue’s lawyers had ruled that he could not comment.

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