My understanding is that “half a dozen” companies will be quizzed next week into their tax deals with HM Revenue and Customs.
Sir Andrew Park, a former judge, has been approached (but not quite appointed) to investigate the agreements that might have benefited companies including Vodafone and Goldman Sachs.
The news comes ahead of a report next Tuesday by the Public Accounts Committee of MPs which will raise serious concerns about the so-called “sweetheart deals”.
Margaret Hodge, chair of the PAC, said she couldn’t comment on the report yet but said:
“We have serious, serious concerns about this whole issue because there is a lot of taxpayers’ money at stake.”
Dave Hartnett, the most senior tax official, earlier this year admitted mistakes in negotiating the deal with Goldmans which removed an estimated £5-8m from its tax bill. He has also faced questions over a controversial £1.25bn settlement with Vodafone.
Mr Hartnett, 60, last week announced his retirement next summer.
The NAO said earlier this year that HMRC’s “high risk corporate programme” launched in 2006 – under which £9bn of settlements had been agreed – had reduced the backlog of cases and contributed to reduced tax avoidance.
But the NAO will next week begin a new examination of several specific cases approved by tax officials.
Sir Andrew is a retired High Court judge who has presided over numerous major tax cases including hearings on the impact of Europe on the British tax system.
The names of all six companies being investigated are not yet in the public domain. I’ve just been reading evidence presented to the PAC this month which suggests that 435 companies have struck deals of over £10m in the last three years. (They are 36 deals of over £100m; 54 deals of £50-100m; and 345 deals of £10m-£50m.)
The PAC report has been leaked to the Times this morning and apparently will call for root-and-branch reform of how the HMRC negotiates such compromises.
The issue of whether the Revenue should waive interest payments will also be raised.
It is not within the PAC’s remit to call for officials to suspend disciplinary action against Osita Mba, the whistleblower behind many of the disclosures. But Ms Hodge did tell me:
“We have been saying that I think the evidence given by the whistleblower has been hugely important in uncovering vital issues and we would want to ensure that he was properly treated and that his rights under the whistleblowing legislation are properly protected.”
Jim Pickard
Kiran Stacey