Campaigners lose tax deal challenge

Campaign group UK Uncut Legal Action has lost its High Court challenge over the legality of the "sweetheart" tax deal between HM Revenue and Customs (HMRC) and Goldman Sachs.

A judge was told the 2010 deal, worth up to £20 million, was allowed to proceed to avoid "major embarrassment" to Chancellor George Osborne and the tax authorities after the bank became "aggressive" and allegedly made threats.

UK Uncut asked Mr Justice Nicol, sitting in London, to declare that HMRC's decision to let the deal go through was legally flawed and involved a breach of statutory duty. The judge ruled the deal was "not a glorious episode in the history of the Revenue" but it was not unlawful.

Tax authority lawyers defended the settlement, saying it was among five big business deals declared "reasonable" by a 2012 report of the National Audit Office (NAO) .

UK Uncut says it is wrong to allow rich companies to avoid paying millions in tax while the Government imposes tough austerity measures on the poor and ordinary taxpayers are pursued for every penny.

Martin Worthy, a director of UK Uncut Legal Action, said after Wednesday's hearing that he was disappointed with the ruling. But he added: "This case has shown that the Government's tough talk on tax is just that - talk not substance."

HMRC said in a press statement: "Large business tax settlements are a vital part of how HMRC secures tax revenues for the country and without them Britain's public finances would be seriously damaged."

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 (Mr) 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... pay their fair share of tax."

Solicitor Rosa Curling, of law firm Leigh Day, which represented UK Uncut Legal Action, said: "This is a disappointing decision but it has been an extremely important case to fight. It has forced HMRC to reveal the process by which it reached a deal with Goldman Sachs, a settlement which let the bank off an estimated £20 million tax owed."

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