The U.K. tax authority “made a mistake” in agreeing to forgive Goldman Sachs Group Inc. as much as 10 million pounds ($16 million) of interest on unpaid tax, its most senior official said.

“I’m entirely responsible for the Goldman Sachs mistake,” Her Majesty’s Revenue and Customs Permanent Secretary for Tax David Hartnett told a parliamentary committee in London today. It was investigating his role in an agreement HMRC made with the New York-based investment bank in December.

The deal resulted in Goldman Sachs paying back taxes it owed on National Insurance payments for bankers’ bonuses, while foregoing interest payments. According to a Guardian report yesterday, which cited documents leaked to Private Eye magazine, Goldman Sachs had avoided paying National Insurance tax on bonuses for bankers working in London by setting up an entity in the British Virgin Islands. The offshore unit technically employed the staff, which were seconded to the U.K. capital.

A Goldman Sachs spokeswoman in London declined to comment.

Hartnett said he and his colleagues created a “bespoke” tax arrangement for Goldman Sachs in order to resolve a “huge relationship issue” between the bank and HMRC. The reprieve was worth “less than 10 million pounds” to Goldman Sachs, Hartnett said. He declined to elaborate further, citing tax confidentiality rules.

“Hartnett should resign,” Jesse Norman, the Conservative Member of Parliament for Hereford and South Herefordshire, who sits on the Treasury Select Committee, said on his website. “In my constituency I have hundreds of small firms, for whom the Revenue’s penalties on unpaid tax are 200 times as high on average as those on large companies. This settlement with Goldman is the last straw.”