HMRC cleared of 'sweetheart deals' with big businesses

HMRC's handling of settlements involving multi million pound disputes between large corporations has been judged as 'reasonable' by the National Audit Office (NAO).

The accusations of 'sweetheart deals', including five high profile cases with corporations including Goldman Sachs and Vodaphone, have been cleared following an investigation by the NAO.

However, the examination by former High Court judge Sir Andrew Park said there were major concerns over the ways in which HMRC handled the settlement processes.

According to the NAO, HMRC had bypassed official settlement processes and had failed to include specialist staff, including key lawyers, in final negotiations.

Amyas Morse, head of the NAO said: "It was not appropriate to set up governance arrangements specific to certain cases or to fail to apply processes correctly. Poor communication with staff also undermined confidence in the settlements."

It said that the actions had created a loss of confidence in HMRC, both internally and externally, and concluded that it needed to strengthen its governance processes.

According to the national press, HMRC said: "We welcome today's report. We have always maintained that the settlements represented good value for the UK."

Dave Harnet, who will step down as HMRC's permanent secretary this summer, was last year questioned by the Public Accounts Committee after accusations he had effectively written off unpaid taxes owed by large companies.

Talking to the Telegraph, Margaret Hodge, chairman of the Public Accounts Committee, said the NAO report had confirmed concerns over the number of 'secret' deals being made with large companies.

Despite HMRC being cleared, anti-cuts campaign group UK Uncut Legal Action has been granted high court permission to pursue certain cases involving the tax man and larger corporations.