Goldman Sachs
Anti-poverty campaigners from the World Development Movement stage a protest outside Goldman Sachs offices to show their support for the Occupy London protest in the City of London, October 27, 2011

The legal arm of the tax pressure group UK Uncut is taking HM Revenue & Customs to court after it failed to provide substantial reasons for failing to collect billions of pounds in tax revenue.

The campaign group will take the government department  to court on Thursday after Leigh Day, its law firm, received a "dismissive" response in answer to a letter demanding that the agreed tax settlement between the outgoing secretary for tax, David Hartnett, and Goldman Sachs be reversed.

The announcement comes on the same day as the Public Affairs Committee criticised the HMRC for its cosy relationship with large corporations, including Goldman Sachs.

Besides UK Uncut's legal action, the report has led to an appraisal of 10 tax disputes by retired high court judge Sir Andrew Park.

Leigh Day confirmed in a letter sent in October that if the settlement reached between HMRC and Goldman Sachs, allegedly allowing the company off £20million worth of tax it owed, was not reversed it would start proceedings to seek specific disclosure of all internal documents relating to any agreement.

Leigh Day lawyer Richard Stein said: "We wrote to the HMRC in October asking them to quash the deal and reclaim the millions unpaid in taxes from one of the world's richest banks but received no response. We chased again in November and they claimed they needed more time.

"They have now replied with what we feel is an extremely weak argument as to why this decision cannot be reversed. Therefore, we will now progress this legal action and issue proceedings in the high court."

Public interest donations

UK Uncut Legal Action has launched a fundraising appeal to back its legal action against HMRC and raised nearly £10,000 in two weeks with more than 2,000 people making small donations. Support for the action has been voiced by over 3,000 individuals and leading anti-poverty NGOs, MPs and unions, including Unite, PCS, GMB, Compass, and the Tax Justice Network.

They have signed a statement which says: "It is undeniably in the public interest that this important case should go through UK courts in order to ensure transparency, accountability and fairness."

Tim Street, director of UK Uncut Legal Action, said: "There is overwhelming public support from unions, NGOs, MPs and thousands of ordinary people who want to see this dodgy tax deal challenged in the courts.

"It shows the deep level of outrage that people feel over state-sanctioned tax-dodging by big business, while government destroys public services that ordinary people rely on, saying that there is no money.

"It shows that the government is making a political choice to turn a blind eye to tax dodging, which loses the public purse £25bn a year. The government is slashing public services and the support for the poorest instead of clamping down on rich tax dodgers. This cannot be allowed to continue.

"Dave Hartnett's retirement is welcome news for campaigners but HMRC needs a massive culture change to stop special treatment for corporations and secret unlawful handshake deals"