The additional corporation tax raised by HMRC enquiries into large businesses hit a ‘record high’ last year, according to the law firm McGrigors. HMRC disclosed in response to a freedom of information request that the additional tax resulting from corporation tax enquiries settled by its Large Business Service (LBS) in 2010/11 was £4.063bn.
McGrigors noted that this marked an 85% increase in yield since 2005/06, when the additional tax take was £2.2bn. But the figures show an increase of only 5% since 2007/08.
The LBS deals with approximately 770 businesses, reduced from 1,124 in March 2008. ‘Several tax lobbying groups, like UK Uncut, claim that the UK government has gone soft on big businesses, but these figures are stark proof that this simply is not the case,’ said Jason Collins, the firm’s Head of Professional and Financial Services.
HMRC was criticised by tax campaigners and the Commons Public Accounts Committee after it emerged that it estimated the ‘tax under consideration’ on all LBS enquiries at £25.5bn as at 31 March 2011. This was not an annual figure but was ‘a snapshot ... including enquiries which may have been open for several years’.
PAC Chairman Margaret Hodge said in December that there was ‘more than £25bn outstanding in unresolved tax bills’. But HMRC had pointed out that this ‘initial estimate’ did not take into account ‘any reliefs or allowances that might be due, or the full facts or any legal issues’.
