Published: November 22nd 2011 - at 1:25 am

HMRC loses all credibility on Goldman Sachs & Vodafone deals


by Sunny Hundal    

This is big news. The National Audit Office has announced that it will appoint its own people to look into the HRMC’s tax avoidance deals with Vodafone and Goldman Sachs.

The judge is expected to be given the power to examine the private accounts of Goldman Sachs and Vodafone to establish whether senior inspectors wrongly “let them off” multi-million-pound tax bills.

The National Audit Office, which is supervising the inquiry, is also considering whether to examine the tax affairs of other big companies to establish whether HMRC officials routinely signed off deals which underestimated the true liabilities of the companies.

Say goodbye to HMRC chief Dave Hartnett.

The investigation signals there is little faith left in how the HMRC conducted the deals itself and let both companies off millions of taxpayers’ money.

As we first reported, Hartnett was called a liar by the Labour MP Margaret Hodge when she questioned him in front of the Public Accounts Committee.

That same day, a Conservative MP Jesse Norman called on Dave Hartnett to resign after questions emerged about earlier evidence he gave to the Treasury Select Committee.

Cabinet Secretary Sir Gus O’Donnell has also appointed two new commissioners with tax expertise to oversee large tax settlements – also signalling how little faith there is in Hartnett.

Hodge released a statement tonight saying:

This judge-led review will be looking at whether the deals that were done were reasonable.

It will examine whether they took proper legal advice and whether HMRC met their own protocols. It will also mean that an independent expert will be able to analyse the details of these deals to determine whether or not the amount they paid in tax was reasonable.

via @Frances_Coppola

Bonus: watch this brilliant stunt by UKuncut on Hartnett


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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments


1. Andy

NOBODY expects the National Audit Office!

/Monty Python ref

Seriously though, I doubt anybody will really be soiling their pants at the prospect of facing the NAO. Remember that their former boss was even more a winer and diner than Hartnett is and it took ages to get rid of him.

2. Joe Gammie

I think the video reminds of Greenpeace, when they name and shame corporations for their behaviour to the environment – and I loved it!

I think LC could do a lot more of this. Expose, reveal and take action against those who would undermine our country, our political and financial institutions, and our media.

What Greenpeace do is take a serious issue, and hit the perpetrators hard. But they also do it with a sense of humour (campaigning against Barbie manufacturer dressed as Ken, or wearing polar bear masks when they went against Cairns Oil). A sense of humour, far more than a rant, and a film, more than written words, can penetrate further into the minds and hearts of normal people.

So, who’s next on the list?

3. Flowerpower

I think LC could do a lot more of this. Expose, reveal and take action against those who would undermine our country, our political and financial institutions, and our media.

This is hardly cutting-edge investigative journalism. All LC has done is to report the fact that the NAO is to hold an investigation……. oh yes, and rush to judgment before that investigation has actually started, never mind reached a verdict.

4. Dave Spart

Hartnett should not only be sacked but thown in prison, preferably the Tower before they chop off his head.

5. Charlie

I think Dave Harnett should start to make up some of this tax shortfall with his Civil Service pension.

6. Schmidt

When Dirty Dave finally goes I’m sure he will suddenly find himself in possession of all sorts of directorships. Just don’t hire him for his knowledge of tax laws.

7. Tim Worstall

I for one think this investigation is absolutely wonderful.

For, as I’ve been shouting about for some time now, I’m deeply unsure that the UK Uncut/MurphySunny/Private Eye version of this story is true.

And I most certainly welcome a thorough investigation into what actually happened.

Be rather amusing to find out that Vodafone never owed anything like £6 billion for example, wouldn’t it?

8. Shinsei67

Ridiculous to say that this means HMRC has lost all credibility. There has been vociferous, though largely unevidenced, claims made against the likes of Vodafone.

Seems eminently sensible to actually investigate such claims and either lay the accusations to rest or uncover that billions have been “let off” tax.

Sunny, you really are jumping the gun on this one.

And, as Tim Worstall says, UKUncut is going to look ridiculous if the case against Vodafone is shown to be false.

And, unfortunately for the rest of us who aren’t keen on stuff like tax havens and offshore companies buying UK property and not paying tax, the fact that UKUncut will have been shown to have acted like spoilt and silly kids just sets back the fight against corporate bad behaviour.

9. Luis Enrique

I don’t know whether Tim W’s speculative/informed account of the Vodafone case is correct:

http://timworstall.com/2011/11/08/so-its-8-billion-for-vodafone-now-is-it/

but if it is, ukuncut and others will only have themselves to blame for not bothering to find out about the substance of what they are campaigning about. If somebody can point me to anti-tax avoidance campaigners attempting something similar to Tim – that is, trying to figure out the details behind the story – I would be pleased to see it. Otherwise I do wish those with a supposed interest in corporate tax avoidance would actually demonstrate some interest in corporate tax avoidance.

here’s a story about how GE does it:
http://marginalrevolution.com/marginalrevolution/2011/11/the-57000-page-tax-return.html

10. Falco

“Hartnett was called a liar by the Labour MP Margaret Hodge when she questioned him in front of the Public Accounts Committee.”

Oh well if he was condemned by the witchfinder general he must be burnt at the stake.

11. Luis Enrique

a new IFS article on corporate tax revenues, with a bit on tax avoidance at the end, for those interested:

http://www.ifs.org.uk/publications/5885

12. Leon Wolfson

There need to to be charges over this, for the people who were negligent.

HMRC needs to be completely restructured, with new staff.

13. David Marsh

Supporting all those who expose corruption your friends at http://www.Tomthumb.info/ thank you.


Reactions: Twitter, blogs
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  27. Alan Simpson

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  28. Simon Proctor

    http://t.co/iidsslv2 The National Audit office is going to audit the taxman over Vodafone and Goldman Sachs! Cool.

  29. Adam Funk

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  30. Alex Braithwaite

    HMRC loses all credibility on Goldman Sachs & Vodafone deals | Liberal Conspiracy http://t.co/XJ7s2vcy via @libcon

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