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* High Court to examine disputed 2010 tax settlement
* Activists say taxman unlawfully saved Goldman $15 million
* Corporate tax avoidance a hot issue in Britain
By Estelle Shirbon
LONDON, May 2 (Reuters) - Britain's tax authority faces acourt challenge on Thursday over a deal with Goldman Sachs worthan estimated 10 million pounds ($15.5 million) to the U.S. bank,a case aimed at pressuring the government into tougher actionagainst corporate tax avoidance.
The challenge by activist group UK Uncut Legal Action stemsfrom public anger in Britain about how big and powerful firmssucceed in paying less tax than many ordinary people strugglingto cope with a stagnating economy and government spending cuts.
The case concerns a settlement reached in 2010 betweenGoldman Sachs and the tax authority (HMRC), to end along-running dispute over a now banned tax avoidance schemeinvolving the payment of bonuses to UK staff via an offshore taxhaven.
UK Uncut Legal Action wants the High Court to declare thesettlement, which allowed Goldman Sachs to pay the principal itowed but not the interest that had accrued during a five-yearbattle with HMRC, as unlawful.
The activist group labels the settlement a "sweetheartdeal", a term rejected by the tax authority.
The risk for Goldman Sachs is further damage to its image inBritain after a public outcry in January caused it to scrapplans to delay paying bonuses to its bankers to make the most ofan income tax cut for high earners.
In financial terms, the disputed $15 million is a drop inthe ocean for a bank that paid its employees $12.9 billion incompensation and benefits last year.
"At a time when the government is making huge, unjust cutsto public spending, the rich must pay their fair share," saidMurray Worthy, director of UK Uncut Legal Action.
The High Court hearing into the Goldman Sachs deal is ajudicial review expected to last one day. The court will reservejudgment until a later date. Goldman Sachs, which will not be anactive participant in the case, declined to comment.
At a time of budget austerity, revelations about the low taxbills of companies ranging from Vodafone to Starbucks have caused widespread outrage in Britain, puttingpressure on the Conservative-Liberal Democrat coalitiongovernment to act.
Finance minister George Osborne has called aggressive taxavoidance "morally repugnant" but critics say his new GeneralAnti-Avoidance Rule is not enough.
Asked to comment on the case, HMRC pointed to a 2012 reportby the National Audit Office (NAO) that said five big businesstax settlements including the Goldman deal were "reasonable" inthat HMRC may have received less if it had litigated and lost.
