Introducing UK Uncut Legal Action

Posted on Fri 28th Oct 2011, 10:46am
This is a guest blog post from UK Uncut Legal Action. Follow them on Twitter and Facebook and check out their website



When activists start talking about court cases, evidence, expert witnesses and meetings with lawyers, it generally means that either they or their friends will be going through a tough and stressful time. Too often it is those people willing to stick their necks out to fight injustice that are dragged through the courts. But not always. Criminal damage to us doesn’t always mean supergluing yourself to Topshop, we believe it is criminal for public servants to act unlawfully, especially when these acts reflect a greed and self-interest that damage us all.

UK Uncut Legal Action is a new, spin-off project, separate to- but inspired by- UK Uncut and their fight for an alternative to the cuts. UK Uncut have shown that the cuts are a political choice, not an economic necessity and that this choice is driven by the interests of big business, the finance sector and wealthy individuals, not caring for people.

Today, UK Uncut Legal Action has announced that it is threatening a legal challenge in the High Court over HMRC’s ‘sweetheart’ tax deal with the investment bank giant, Goldman Sachs. The crux of the matter appears to be that back in the 1990s, Goldman Sachs didn’t want people to know just how much money their bankers were being paid, and they allegedly didn’t fancy paying all of their National Insurance contributions. Reportedly, they set up a new company in the British Virgin Islands, and bought into a scheme called Employment Beneficiary Trusts. It wasn’t until 2005, after much legal wrangling, the courts declared that these Trusts were tax avoiding schemes, and it was time to pay back £30 million that they’d saved through using these schemes.

But Goldman Sachs didn’t feel like paying back the £30 million and fought tooth and nail in the courts against reimbursing the public purse. Time ticked on, and it wasn’t until 2010 that a judge threw out the claim from the Bank that their true employer was in the British Virgin Islands. Goldman Sachs’s debt to society now stood at the £30 million, plus £10 million in interest.

Goldman Sachs baulked at paying back what they owed, and so in late 2010, it’s been said in the press that they did what any self-respecting wannabe tax dodger does; they wined and dined Dave Harnett, HMRC’s top tax man. By the end of the brandy and cigars, it was all sorted. Goldman Sachs would pay back the original £30 mil and Dave would forget about the £10 million interest. Who needs it? You can’t buy many books, nurses or school meals with it anyway.

As the secret ‘sweetheart’ deal came to light, it all got a bit embarrassing in the press and in parliament. Dave Hartnett suggested to a Select Committee that it was a junior official’s error because of a misinterpretation of the law. According to the Guardian this month, HMRC sources privately confirm that £10m of taxpayers’ money was thrown away because of a “technical mistake” by an unidentified official, junior to Hartnett, who misinterpreted the law.

As anyone who has had any dealings with HMRC will know, there are procedures, policies and forms of many, many pages that must be filled in, in the right order and by the right date. We can’t buy Dave Hartnett a couple of cocktails and he’ll look the other way when it comes to our tax returns or National Insurance contributions.

This is at the heart of our legal action. We are saying that if was a genuine mistake, then it can be rectified and the money paid back. And being the reasonable people that we are, we have given them a couple of weeks to do so. If not though, we will see them in court, as we believe that this handshake agreement is unlawful because, reportedly, Dave didn’t follow HMRC’s own procedures. So if it’s not quashed, Dave’s dodgy deal could land him in the dock.