More than £25 billion of tax was ‘under consideration’ in HMRC’s Large Business Service (LBS) enquiries at 31 March 2011, but the department emphasised that the estimate did not represent tax owed or unpaid.
More than £25 billion of tax was ‘under consideration’ in HMRC’s Large Business Service (LBS) enquiries at 31 March 2011, but the department emphasised that the estimate did not represent tax owed or unpaid.
‘It is a tool which helps LBS managers to better direct resources in order to produce the best results,’ HMRC said, and officers are encouraged ‘to be expansive in their initial estimate rather than limiting themselves’.
Responding to a freedom of information request, HMRC said: ‘The initial estimate doesn’t take into account any reliefs or allowances that might be due, or the full facts or any legal issues.’
|
tax under consideration in all LBS enquiries |
£25.5 billion |
|
tax under consideration in LBS CFC enquiries |
£3.75 billion |
|
number of issues under enquiry by LBS, of which 134 involved CFCs |
2,721 |
Source: HMRC response to FoI request, published 20 June 2011
HMRC added that in many cases it becomes clear during the course of an enquiry that there is no further liability at all. Experience shows that when officers look across all relevant issues under enquiry ‘only around half of the estimate of tax under consideration is tax brought into charge’.
Tax of £3.75 billion was ‘under consideration’ in relation to enquiries concerning the controlled foreign companies rules.
An HMRC spokesman told Tax Journal today that the additional tax yield arising from LBS work increased from £3.6bn in 2005/6 to £5.7bn in 2010/11.
Penalties
HMRC were criticised earlier this year after a freedom of information disclosure revealed that only a handful of companies handled by the LBS were charged penalties for negligence in tax returns in each of the last four years.
Penalties cannot be imposed for legal tax avoidance, however, and Dave Harnett, HMRC’s Permanent Secretary for Tax, told MPs that there was more tax evasion in small business than in big business.
HMRC had been asked to update figures set out in a National Audit Office report published in 2007. They said in February that fewer than five penalties had been imposed so far during 2010/11.
|
Year |
No of penalties |
Total £ |
||||||||||
|
2010/11 (to date) |
< 5
Issue:
1084
Categories: News , Anti-avoidance , Compliance , Compliance , Corporate taxes , Corporation tax , Investigations , Litigation , Tax policy & administration , Tax risk Related articles:
Large businesses enquiries: HMRC qualifies £25bn estimate
© Copyright LexisNexis 2024. All rights reserved.
4 July 2011
More than £25 billion of tax was ‘under consideration’ in HMRC’s Large Business Service (LBS) enquiries at 31 March 2011, but the department emphasised that the estimate did not represent tax owed or unpaid. More than £25 billion of tax was ‘under consideration’ in HMRC’s Large Business Service (LBS) enquiries at 31 March 2011, but the department emphasised that the estimate did not represent tax owed or unpaid. ‘It is a tool which helps LBS managers to better direct resources in order to produce the best results,’ HMRC said, and officers are encouraged ‘to be expansive in their initial estimate rather than limiting themselves’. Responding to a freedom of information request, HMRC said: ‘The initial estimate doesn’t take into account any reliefs or allowances that might be due, or the full facts or any legal issues.’
Source: HMRC response to FoI request, published 20 June 2011 HMRC added that in many cases it becomes clear during the course of an enquiry that there is no further liability at all. Experience shows that when officers look across all relevant issues under enquiry ‘only around half of the estimate of tax under consideration is tax brought into charge’. Tax of £3.75 billion was ‘under consideration’ in relation to enquiries concerning the controlled foreign companies rules. An HMRC spokesman told Tax Journal today that the additional tax yield arising from LBS work increased from £3.6bn in 2005/6 to £5.7bn in 2010/11. Penalties HMRC were criticised earlier this year after a freedom of information disclosure revealed that only a handful of companies handled by the LBS were charged penalties for negligence in tax returns in each of the last four years. Penalties cannot be imposed for legal tax avoidance, however, and Dave Harnett, HMRC’s Permanent Secretary for Tax, told MPs that there was more tax evasion in small business than in big business. HMRC had been asked to update figures set out in a National Audit Office report published in 2007. They said in February that fewer than five penalties had been imposed so far during 2010/11.
|
