The total revenue HMRC generated from tax investigations and other compliance activity has risen to £30.8bn in 2021, up from £28bn in 2020, as it pursues tax lost to evasion or avoidance during the pandemic, according to research from Pinsent Masons.
In the past year, HMRC has collected £5.8bn in cash from its tax investigations activity and prevented a further £11.2bn in revenue being lost. It has also benefitted by £6.4bn from closing tax loopholes, such as one which allowed owners of second homes to avoid tax by claiming their often-empty properties are holiday lets.
One key area of focus for HMRC is investigating tax it believes is underpaid by the biggest businesses. Income from investigations into the 2,000 biggest businesses in the year to 31 March 2021 brought in £8.6bn and accounted for 28% of all HMRC’s tax investigations yield last year. HMRC believes that £35.8bn of tax may have been underpaid by big businesses over the same period.
Steven Porter, partner at Pinsent Masons, says that the enormous return on investment in large business investigations means HMRC is likely to continue targeting them in 2022 and beyond. A study by his firm found that HMRC’s Large Business Directorate, the team responsible for investigating the tax affairs of the UK’s biggest and most complex businesses, had a staff bill of ‘just’ £125m, generating a 6,800% return on investment on the £8.6bn it brought in.
Steven Porter says: ‘HMRC undertakes a huge programme of compliance activity every year. This goes for large corporates as well as smaller businesses and individuals. HMRC’s stance on corporates underpaying tax has hardened significantly in recent years and is only likely to get tougher as it uses international data, big data and artificial intelligence to help it pursue unpaid tax.’
The total revenue HMRC generated from tax investigations and other compliance activity has risen to £30.8bn in 2021, up from £28bn in 2020, as it pursues tax lost to evasion or avoidance during the pandemic, according to research from Pinsent Masons.
In the past year, HMRC has collected £5.8bn in cash from its tax investigations activity and prevented a further £11.2bn in revenue being lost. It has also benefitted by £6.4bn from closing tax loopholes, such as one which allowed owners of second homes to avoid tax by claiming their often-empty properties are holiday lets.
One key area of focus for HMRC is investigating tax it believes is underpaid by the biggest businesses. Income from investigations into the 2,000 biggest businesses in the year to 31 March 2021 brought in £8.6bn and accounted for 28% of all HMRC’s tax investigations yield last year. HMRC believes that £35.8bn of tax may have been underpaid by big businesses over the same period.
Steven Porter, partner at Pinsent Masons, says that the enormous return on investment in large business investigations means HMRC is likely to continue targeting them in 2022 and beyond. A study by his firm found that HMRC’s Large Business Directorate, the team responsible for investigating the tax affairs of the UK’s biggest and most complex businesses, had a staff bill of ‘just’ £125m, generating a 6,800% return on investment on the £8.6bn it brought in.
Steven Porter says: ‘HMRC undertakes a huge programme of compliance activity every year. This goes for large corporates as well as smaller businesses and individuals. HMRC’s stance on corporates underpaying tax has hardened significantly in recent years and is only likely to get tougher as it uses international data, big data and artificial intelligence to help it pursue unpaid tax.’
