HMRC chief under pressure to quit over Goldman Sachs tax let-off

Top official admits error but denies lying to MPs after bankers avoided multimillion pound bill

Britain's top Inland Revenue official faced demands last night to quit after being accused of lying over a deal that spared Goldman Sachs a multimillion pound tax bill for its bankers' bonuses.

Dave Hartnett, permanent secretary for tax at HM Revenue & Customs (HMRC), apologised for a "mistake" that allowed the Wall Street institution to avoid paying interest after settling a five-year legal dispute with UK tax authorities. But he denied lying to MPs.

Mr Hartnett faced a barrage of hostile questions yesterday from the Commons Public Accounts committee.

Its chairwoman, Margaret Hodge, repeatedly accused him of lying to the Treasury Select Committee – which he last month told that he "did not deal" with the tax affairs of Goldman Sachs.

"I did not lie," Mr Hartnett said yesterday. He insisted he had no daily involvement with the bank's affairs.

However, she quoted minutes of an HMRC lawyers' meeting that said Mr Hartnett had "shaken hands" on a settlement he brokered with three Goldman Sachs executives last December.

Mr Hartnett said he became involved only because the relationship between other HMRC and bank representatives had broken down.

But he insisted: "I did not do a deal personally. I did not waive interest away." He added: "I have no recollection of shaking hands... A mistake was made, for which I am very sorry and my colleagues are very sorry."

He took responsibility for the error but said no one had been disciplined.

"The mistake was made by a number of people and we have made sure that a mistake like that can't be made again," he said.

Last night Jesse Norman, a Tory MP on the Treasury committee, said Mr Hartnett should resign and added: "This settlement with Goldman Sachs is the last straw. He [Mr Hartnett] strongly implied he was not involved in the Goldman Sachs case. He told me the Revenue never charged less than the tax owing. The... case shows this to be false."

Challenged by Mrs Hodge whether the taxpayer was "ripped off" by £10m in the deal, the HMRC chief replied: "The sum was smaller than that."

When he refused to divulge how much on grounds of "taxpayer confidentiality", Mrs Hodge accused him of "hiding behind" the rule in an "outrageously unprecedented" way. He insisted he was acting on legal advice.

Amyas Morse, head of the National Audit Office spending watchdog, estimated the loss at £5m to £8m.

Another 20 firms who used a similar tax avoidance scheme caved in after a court ruling but Goldman Sachs refused to pay its £30.81m bill, which rose to £40m when interest mounted.

Minutes of the HMRC lawyers' meeting, leaked to Private Eye magazine, cited the "difficulty" senior figures had in accepting the no-interest deal.

Mrs Hodge quoted the HMRC's Anthony Inglese saying he "would always want to assist Dave Hartnett, but not if this were unconscionable".

The HMRC head admitted meeting bank executives for lunch and supper but said he had "no idea" about the dispute at the time.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Joe Cocker performing on the Stravinski hall stage during the Montreux Jazz Festival, in Montreux, Switzerland in 2002
musicHe 'turned my song into an anthem', says former Beatle
News
Clarke Carlisle
sport
Sport
footballStoke City vs Chelsea match report
Arts and Entertainment
David Hasselhof in Peter Pan
theatreThe US stars who've taken to UK panto, from Hasselhoff to Hall
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
News
newsIt was due to be auctioned off for charity
News
Coca-Cola has become one of the largest companies in the world to push staff towards switching off their voicemails, in a move intended to streamline operations and boost productivity
peopleCoca-Cola staff urged to switch it off to boost productivity
Environment
Sir David Attenborough
environment... as well as a plant and a spider
Voices
'That's the legal bit done. Now on to the ceremony!'
voicesThe fight for marriage equality isn't over yet, says Siobhan Fenton
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Regulatory / Compliance / Exeter

Excellent Salary: Austen Lloyd: Exeter - An excellent opportunity for a Solici...

Ashdown Group: IT Support Technician - 12 Month Fixed Term - Shrewsbury

£17000 - £20000 per annum: Ashdown Group: IT Helpdesk Support Technician - 12 ...

The Jenrick Group: Maintenance Planner

£28000 - £32000 per annum + pension + holidays: The Jenrick Group: Maintenance...

The Jenrick Group: World Wide PLC Service Engineer

£30000 - £38000 per annum + pesion + holidays: The Jenrick Group: World Wide S...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'