When negotiating the settlement with company E, the Department’s staff believed that there was a barrier to charging interest on the employer’s National Insurance contributions (NICs). There was no barrier to charging interest, and the Department did not check this before agreeing to settle without interest. The Department’s decision not to charge interest was reasonable in the context of reaching a settlement on several issues, but the Department should have checked the position on interest so that it could have made an informed decision on this issue.
As I speculated when the case was first discussed, there never was any being let off tax. It was about charging interest on the amount that had been owing throughout the period of litigation.
And since the other companies involved in exactly the same schemes had not paid interest on the late paid NICs then, well, OK, perhaps GS should have done because they litigated and perhaps they shouldn\’t.
But note that the \”deal\” here was HMRC\’s own inabiity to know what the law actually was: making that spirit thing really very hard to defend, eh? For if HMRC themselves don\’t know what the letter is then how can anyone divine the spirit?