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Are there ‘sweetheart’ deals between HMRC and big business?

The victimisation of Osita Mba is upsetting. He is a revenue solicitor at HMRC who worked on the Goldman Sachs case where the latter fought for 5 years in the courts to avoid a tax liability. But when they finally lost, Dave Hartnett, the Revenue permanent secretary, reached a private deal with them in December 2010 to let them off the £10m charge they were liable to pay in interest for withholding the tax unpaid over the 5 year period.

Mba was clearly shocked at this concession after Goldman had used every legal and accountancy artifice to evade their responsibilities, and acting a whistleblower wrote in March 2011 to the National Audit Office to express his disquiet. As a result the Treasury select committee interviewed Hartnett in September and he insisted the deal had been reached properly.

Next month Mba wrote to both the Public Accounts (PAC) and Treasury select committees alleging Hartnett had misled them over his role, a charge that the PAC then put to Hartnett and his senior officials. The result has been a judge appointed to investigate 4 other tax deals signed off by Hartnett with big business.

It is now known that in October last year, the day after Mba had written to the two parliamentary select committees, one of his managers sent the address and 4 telephone numbers belonging to Mba and his wife to the HMRC criminal investigations unit. Clearly this was designed to be a means of shutting up an irritant in the Department whose whisleblowing was so serious it actually led to Hartnett’s premature retirement. However this act of sweet revenge fell foul of the Data Protection Act 1998, leading the information commissioner to demand an explanation before taking action.

Two things are disturbing about this saga. One is that it leaves open how many other secret corporate deals may lie undetected in the vaults of the HMRC. There are already claims that a similar big deal was struck with Vodaphone. But how many others as well? The second is that after the collusion between Murdoch and Scotland Yard which for years hid behind the canard that there was just one rogue reporter, one wonders whether a similar ‘understanding’ has been reached between the non-taxpaying corporate fraternity and HM tax collectors? After all, it’s difficult to explain how so many of the FTSE-100 top companies year after year pay next to nothing in tax, indeed less proportionately than their cleaning ladies, leaving a gap in Exchequer revenues of £42bn a year (on HMRC’s own estimate), equal to nearly half the entire UK budget deficit.

One Comment

  1. Gary Elsby says:

    Isn’t the Vodafone deal worth(less) to HMRC approx £7bn?

    I know for a fact that HMRC are persecuting small busineesses for a few hundreds of pounds for late payments of VAT (fines calculated on one day late by percentage increases if repeated).
    These are the yellow letters sent out on mass about two years ago across the Country.

    Is it any wonde that late payments have and are being made by small business with a severe cash flow during the world’s biggest recession?

    Big business makes deals and HMRC threatens baliff action and massive penalties to small business.

    A National scandal.

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