30 Apr 2013 09:36am

Leaked memos give details of "sweetheart deals"

The government settled for £4.5bn from a series of four “sweetheart” tax deals, according to reports

The Guardian has reported on a leaked memo between Dave Hartnett, former head of tax at HMRC, and David Gauke, the exchequer secretary at the Treasury. The memo suggests that £1bn as a settlement is not out of the ordinary, and that four deals had reached settlements worth £4.5bn between them.

Agreements are usually secret between the Revenue and companies, although campaigners have been calling for HMRC to make specific details of the deals public.

The seven-page memo sent by Hartnett in December 2011 asked for support in the face of growing media criticism

He wrote, "In 2006, HMRC adopted a new approach to reaching tax settlements with large business through building constructive relationships and encouraging mutual openness and transparency, increasing certainty for business and reducing the time taken to resolve issues. Settlements of above £1bn are now not uncommon and £4.5bn … has come from just four settlements with bespoke governance."

Hartnett claimed in his submission to Gauke that the programme had allowed the government to bring in an extra £9bn in revenue in total.

Vodafone’s £1.25bn deal agreed in 2010 is believed to make up part of the £4.5bn figure, the Guardian reported, but the names of the other companies were not revealed.

Margaret Hodge, the chair of the Public Accounts Committee, said that her committee would be raising the matter with HMRC.

An HMRC spokesman said, “The National Audit Office looked into the ‘bespoke governance’ settlements, finding they represented good value for the country and were properly carried out. However, since then we have significantly improved the transparency of the governance around our large business settlements.”

Separately, the Guardian has reported that tax officials used intrusive investigative powers to track down HMRC solicitor Osita Mba, the whistleblower who has spoken to the newspaper. Mba gave details about the Goldman Sachs deal to two parliamentary committees and the National Audit Office (NAO)

Helen Roxburgh

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