Wednesday, 12 October 2011

Goldman's sweet deal with HRMC

There are days when I am filled with despair about Britain. I just read this article in Telegraph about the reprehensible behaviour of Goldman Sachs, and the despicable response of Her Majesty's tax collectors.

It appears that the Bank "seconded" its staff to an offshore subsidiary - Goldman Sachs Services Ltd. According to the Telegraph, this scheme allowed those big banking bonuses to be indirectly invested into elaborate share option schemes. However, in 2009, a British judge called time on this caper, describing it "a way of keeping information about the GS accounts and payroll out of the public domain and confidential".

When the scheme was declared illegal, Goldman owed the UK taxpayer interest on its outstanding obligations. Did it play the good corporate citizen and pay? What do bears do in the forest? What do greedy bankers do in the city of London?

This is how the Telegraph descries that happened next:

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.

When you are paying out tax as a wage earner, don't you wish you could "shake hands" on a secret settlement?

Rather than negotiating with these deviants, the HMRC should have promptly returned them to court where a sturdy English judge should have rebuked them, and handed out further punishment to provide both retribution and compensation.

Of course, that didn't happen. A slimey compromise seemed the better option for the HMRC.


Lionel said...

The vampire squid strikes again.

Jim said...

I'm afraid this is a version of the old 'If you owe the bank £100 its your problem, if you owe them £100m its theirs' conundrum.

GS probably pay so much tax in the UK that HMRC don't want to p*ss them off so much that they up sticks and move. If they did leave the loss in revenue would make £30m chump change.

Its down to leverage I'm afraid. GS have it over the State, and individuals don't. Simple as that.

Be honest. If you could screw HMRC over you would, wouldn't you?

Michael Fowke said...

Don't be too hard on Goldman. They're having a rough time of it, what with all this absurd talk of vampires, and squids.

Anonymous said...

Goldman Sachs would not even exist were it not for the kindly taxpayers of the uk and US bailing out their counter parties and reducing their funding costs with zero interest rates, quantitative easing and taxpayer guarantees. Let them f*** off abroad and let some other taxpayers pick up the tab - if there are any takers.

I_don't_work_for_anyone said...

Private Eye had this about 2 months ago. The same tax man did this deal also let Vodaphone off paying a fraction of that owed and about one billion pounds less than Vodaphone expected. Maybe the job cuts should start with him. Oh I forgot he is a member of the 'Chipping Norton Set' all buddies of David Cameron.