HMRC has recently published Large Business Panel Survey 2014 (see www.bit.ly/1O3aAAO), which details HMRC’s research on large UK businesses’ experiences of dealing with HMRC, their views on the administration of tax policy and wider influences on their attitudes to tax. The key findings are:
70% of taxpayers managed by HMRC’s large business service (LBS) felt HMRC provides their business with certainty in their tax affairs in 2014; although only 60% of businesses with a HMRC customer relationship manager (CRM), and 50% of businesses with an assigned point of contact (CC) with HMRC, agreed;
While the majority of large businesses described their experience of dealing with HMRC as ‘good’ or ‘very good’ – 87% of LBS customers, 78% of CRM customers and 68% of CC customers – fewer LBS respondents felt positively about dealing with HMRC than prior years (where over 90% responded positively); while CRM and CC results remained fairly flat (but down from 2012);
8% of LBS, 6% of CRM and 3% of CC respondents said they had actively considered re-locating their business or parts of their business from the UK to another country, which was in line with 2013 but significantly lower than the proportions saying they had considered relocation in 2010 (when the figures stood at 26%, 19% and 8% respectively);
The reduction in the corporation tax rate has been received positively by the majority of large businesses, but only 18% of all respondents were positive about the patent box reforms (most were either neutral or unaware), and 15% were positive about CFC reforms (again most were either neutral or unaware), while 40% were positive about the increase in the annual investment allowance.
Attitudes to tax avoidance changed significantly in the year: only 30% of LBS respondents felt it was acceptable, while 22% of CRM and 12% of CC felt it was acceptable (decreases of 45%, 32% and 23% respectively). Nevertheless, over 70%of all large business customers were in agreement that they were always open to ways to legally reduce tax payments but disagreed they would look to reduce tax liabilities through recognising profits in more favourable tax regimes and reduce the personal tax liabilities of directors and senior staff.
55% of LBS, 45% of CRM and 28% indicated that there had been increased scrutiny at a senior level over all tax planning measures in last 12 months.
Changes in customer relationship managers or point of contact were cited as a problem among some respondents. One respondent told HMRC: ‘[We] had a very, very good CRM who cleared a lot of issues but that is going back 3 years. He moved on within HMRC and he was replaced with a CRM which, although my boss has met, I have never met; we heard nothing from him since. We have since found out from our auditors that he has now moved on and we now have another CRM who we haven’t met.’
Most large business customers felt that HMRC administers the tax system fairly, though a few businesses perceived the reduction in resources at HMRC over the last few years had started to erode some of their confidence. ‘HMRC don’t seem to work to any deadlines, they respond whenever it suits them which does not seem fair’, said one. ‘It seems that they [HMRC] are under a lot of pressure and haven’t got time,’ answered another. ‘They are short-staffed and under-resourced.’
‘Historically we have had a very good relationship with HMRC,’ said a third. ‘In the last 12 months HMRC has become more aggressive, we’ve seen a drop in the level of trust that they are prepared to show towards us… where previously we have had quick resolutions, [now] what we are seeing is more and more requests for data and information but less and less action on the back of it.’
HMRC has recently published Large Business Panel Survey 2014 (see www.bit.ly/1O3aAAO), which details HMRC’s research on large UK businesses’ experiences of dealing with HMRC, their views on the administration of tax policy and wider influences on their attitudes to tax. The key findings are:
70% of taxpayers managed by HMRC’s large business service (LBS) felt HMRC provides their business with certainty in their tax affairs in 2014; although only 60% of businesses with a HMRC customer relationship manager (CRM), and 50% of businesses with an assigned point of contact (CC) with HMRC, agreed;
While the majority of large businesses described their experience of dealing with HMRC as ‘good’ or ‘very good’ – 87% of LBS customers, 78% of CRM customers and 68% of CC customers – fewer LBS respondents felt positively about dealing with HMRC than prior years (where over 90% responded positively); while CRM and CC results remained fairly flat (but down from 2012);
8% of LBS, 6% of CRM and 3% of CC respondents said they had actively considered re-locating their business or parts of their business from the UK to another country, which was in line with 2013 but significantly lower than the proportions saying they had considered relocation in 2010 (when the figures stood at 26%, 19% and 8% respectively);
The reduction in the corporation tax rate has been received positively by the majority of large businesses, but only 18% of all respondents were positive about the patent box reforms (most were either neutral or unaware), and 15% were positive about CFC reforms (again most were either neutral or unaware), while 40% were positive about the increase in the annual investment allowance.
Attitudes to tax avoidance changed significantly in the year: only 30% of LBS respondents felt it was acceptable, while 22% of CRM and 12% of CC felt it was acceptable (decreases of 45%, 32% and 23% respectively). Nevertheless, over 70%of all large business customers were in agreement that they were always open to ways to legally reduce tax payments but disagreed they would look to reduce tax liabilities through recognising profits in more favourable tax regimes and reduce the personal tax liabilities of directors and senior staff.
55% of LBS, 45% of CRM and 28% indicated that there had been increased scrutiny at a senior level over all tax planning measures in last 12 months.
Changes in customer relationship managers or point of contact were cited as a problem among some respondents. One respondent told HMRC: ‘[We] had a very, very good CRM who cleared a lot of issues but that is going back 3 years. He moved on within HMRC and he was replaced with a CRM which, although my boss has met, I have never met; we heard nothing from him since. We have since found out from our auditors that he has now moved on and we now have another CRM who we haven’t met.’
Most large business customers felt that HMRC administers the tax system fairly, though a few businesses perceived the reduction in resources at HMRC over the last few years had started to erode some of their confidence. ‘HMRC don’t seem to work to any deadlines, they respond whenever it suits them which does not seem fair’, said one. ‘It seems that they [HMRC] are under a lot of pressure and haven’t got time,’ answered another. ‘They are short-staffed and under-resourced.’
‘Historically we have had a very good relationship with HMRC,’ said a third. ‘In the last 12 months HMRC has become more aggressive, we’ve seen a drop in the level of trust that they are prepared to show towards us… where previously we have had quick resolutions, [now] what we are seeing is more and more requests for data and information but less and less action on the back of it.’
