A senior judge is to be brought in to investigate a series of controversial tax deals which cost the Exchequer millions of pounds in lost revenue.
The judge is expected to be given the power to examine the private accounts of Goldman Sachs and Vodafone to establish whether senior revenue inspectors wrongly "let them off" multi-million pound tax bills.
The National Audit Office, which is supervising the probe, is also considering whether to examine the tax affairs of other companies to establish whether HMRC officials signed off deals which underestimated the true liabilities of the companies.
The move comes after the House of Commons Public Accounts Committee (PAC) accused the HM Revenue and Customs head Dave Hartnett of misleading parliament following a deal with Goldman Sachs that allowed the US investment bank to avoid more than £10m in tax penalties.
They also accused officials of allowing Vodafone to pay just £1.25bn in a tax dispute with the Government, despite facing a potential tax bill of as much as £8bn.
In a sign of how seriously the Government regards the problems facing HMRC, Sir Gus O'Donnell, pictured left, the Cabinet Secretary, has announced the appointment of two new commissioners with tax expertise to oversee large tax settlements. The commissioners, who are officially appointed by the Crown to represent the interests of the taxpayer, are the only people with the authority to sign off such deals with large companies.
Previously HMRC had four commissioners and only one, Mr Hartnett, had direct experience of dealing with highly complicated tax liability issues.
The PAC is due to publish its report into HMRC before the end of the year. It is likely to be highly critical of Mr Hartnett and the general management of the agency.
Margaret Hodge, the chair of the PAC, said: "This judge-led review will examine whether [HMRC] took proper legal advice and ... whether or not the amount they paid in tax was reasonable."Reuse content