Can someone explain this Goldman\’s tax thing to me?

HMRC has been accused of forgiving Goldman for millions of pounds of tax that should have been paid on remuneration and bonus payments that were paid through an off-shore company in the British Virgin Islands.

After a clamp-down on the loop-hole by Gordon Brown, 21 firms settled with HMRC. Goldman held out because HMRC had made a technical mistake in its handling of Goldman\’s case by assessing its UK company rather than the off-shore one.

Here\’s what I think I understand so far.

Lots of companies try to dodge NI payments by complex fiddle. Loophole closed. Most companies cough up. Goldmans decide to fight through the courts.

No, don\’t know why, could be that mistake described above meant they thought they could win. Dunno.

Now, as far as I can tell, the £10 million that they were \”let off\” is the interest.

So, is interest payable when you\’re litigating a tax bill? Does the court, or the law, say, well, you know, interesting point you\’ve raised there, no interest payable until it\’s resolved?

Or is it winner takes all? Full interest is payable either way once resolved?

Or is there something else about this case?

The reason I ask is of course that this story comes from hte same source as the Vodafone £6 billion one. And as there never was a £6 billion, it makes the source a little dodgy on tax issues.

6 thoughts on “Can someone explain this Goldman\’s tax thing to me?”

  1. Usually interest is payable when you lose, all the way back from when you should have first paid the tax.

    But the quote says that HMRC issued the assessment on the wrong company.

    If the due date depends on HMRC issuing the assessment (which it doesn’t usually these days, but perhaps it did here), then the interest wouldn’t start running until they issued it properly, on the correct company.

  2. No magic about this surely: if you litigate to claim a debt and you win, you get interest as well. This settled short of going to court so the Revenue presumably came to a deal, and the agreement re interest must have reflected their view of what was on offer vs what they thought they’d get if it went to court.

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