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View Full Version : Goldman Sachs 'escaped paying £20m National Insurance bill in HMRC deal'



AtW
11th October 2011, 20:25
The Wall Street bank – which last year paid $15.3bn (£9.5bn) in bonuses to its employees – is understood to have made a sweetheart deal with HMRC which allowed it to avoid paying the full interest on a failed tax avoidance scheme set up in the 1990s.

Around that time, Goldman is understood to have set up an offshore company in the British Virgin Islands called Goldman Sachs Services Ltd. This employed all of Goldman's London bankers, who were then "seconded" to work there.

In 2009, Judge David Williams said the Virgin Islands company seemed to be created as "a way of keeping information about the GS accounts and payroll out of the public domain and confidential".

But the Goldman Virgin Islands employee benefit trust (EBT) was not alone; 21 other investment banks and other firms had also created offshore EBTs, which allowed bonuses to be indirectly invested into elaborate share option schemes. :eyes

However, in 2005 a court ruled in favour of HMRC that the EBTs were illegitimate tax avoidance devices. The 21 other firms accepted the ruling and compensated the revenue on what was owed.

But Goldman Sachs refused to pay its £30.8m bill. By 2010, according to a public judgment, the unpaid bill with accumulated interest had mounted to £40m.

According to a leaked Government document revealing the minutes of a meeting on December 8 2010 chaired by HMRC general counsel Anthony Inglese, Goldman's tactics were obstructive.

The document also claims that the permanent secretary Dave Hartnett had "shaken hands" on a secret settlement with Goldman Sachs.

HMRC said in a statement: "The picture you have been given is incomplete and therefore fundamentally flawed but taxpayer confidentiality prevents us from correcting your story in detail. Dave Hartnett's long career in the tax service has been built on ensuring the right tax is paid by large businesses and individuals alike. HMRC does not do 'sweetheart' deals."

Mr Hartnett is due to be questioned on Wednesday by the Commons public accounts committee.

Goldman Sachs declined to comment.

Source: Goldman Sachs 'escaped paying £20m National Insurance bill in HMRC deal' - Telegraph (http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8821083/Goldman-Sachs-escaped-paying-20m-National-Insurance-bill-in-HMRC-deal.html)

TimberWolf
11th October 2011, 21:56
a survey shows that all but two of the UK's biggest 100 companies have subsidiaries in tax havens
BBC News - Tax havens: Is the tide turning? (http://www.bbc.co.uk/news/magazine-15239196)

Only little people pay taxes, apart from UK IT contractors who have to pay twice.