High Court judge Lord Justice Simon gave a UK Uncut spinoff group permission today to sue HM Revenue & Customs for the multimillion-pound tax write-off its chief Dave Hartnett handed to investment bankers Goldman Sachs.
Lawyers for UK Uncut Legal Action said that the "sweetheart deal" was not just morally wrong but also illegal.
Their case centres on a secret 2010 meeting in which Mr Hartnett met Goldman Sachs representatives to discuss a decade's worth of outstanding payments resulting from a failed bid to dodge National Insurance.
Leaked minutes show Mr Hartnett had "shaken hands" on a deal whereby Goldman Sachs paid back only the original sum without interest - but without consulting HMRC lawyers or the board which vets such negotiations.
The tax department's legal chief later told Mr Hartnett that he could scrap the deal as it could be considered void, but UK Uncut Legal Action's lawyers said today that they believe his decision to accept the out-of-court settlement represented a breach of HMRC legal obligations.
Barrister Ingrid Simler of Leigh Day & Co said even a "quick perusal" of the issues revealed a case of great importance to the public - and to the integrity of HMRC itself.
"Does HMRC, when a mistake is made, put this embarassment of acknowledging the mistake aside - or does it resist the correction?" she asked.
Defence counsel James Eady urged the court to delay its decision until the National Audit Office's "full and proper" report on the affair - published today.
The auditors could keep sensitive details in a "bubble" of secrecy, thereby respecting Goldman Sachs's right to taxpayer confidentiality, he said - whereas an open court would require lengthy battles over disclosure.
But Mr Justice Simon had none of it - any report was simply "not able to address the question of legality.
"If am very doubtful it would be just or convenient to go beyond facts which are in the public domain," he said.
But it was a bitter-sweet win for the campaigners, with Mr Justice Simon adding he did not intend to debate a return to litigation. The court could address legality, but the group had no automatic right to overturn the settlement.
UK Uncut Legal Action's nominal director Murray Worthy told the Morning Star they nonetheless welcomed the decision.
"The public have the right to know why multibillion-pound investment banks are being let off tax while vital public services are being cut," he said.
It was vital that the details of the Goldman Sachs decision be addressed in a court of law, he said, as the National Audit Office and Commons public accounts committee had only looked at the deal as a policy issue, "but the issue is one of legality and justice, which only the court can decide."
The group would now discuss with their solicitors whether to appeal over the case for litigation, he added.
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