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How big firms avoided up to £25bn in taxes

Big businesses could be forced to cough up £25billion of underpaid tax in a major crackdown on avoidance.

Britain’s largest firms are being investigated by HMRC for potentially dodging £24.8billion of VAT, corporation tax and national insurance payments last year.

It is enough to fund the NHS for nearly three months.

HMRC are probing Britain’s largest firms who are accused of dodging £25bn in tax 

The investigations highlight the scale of efforts by powerful companies to avoid paying their fair share.

HMRC’s probes have snowballed as public anger at fat cat greed grows. The amount of suspected uncollected tax from the year to March is 14 per cent higher than the previous 12 months.

It is 31 per cent more than two years earlier.

Law firm Pinsent Masons, which uncovered the figures, says this means the taxman’s large business directorate is taking a more zealous approach. But tax investigations are the first stage in a tug of war between the exchequer and businesses and there is no guarantee the money will ever end up in Government coffers.

If HMRC experts have suspicions, they can examine a company’s books and then amass enough evidence to demand it pays up.

But many firms refuse and appeal the decision, leading to lengthy wrangling in the courts. Pinsent Masons partner Heather Self said: ‘HMRC is broadening its horizons and putting a far wider range of transactions under scrutiny. We are seeing an increasing number of challenges to arrangements that would previously have been regarded as routine and perfectly acceptable.

‘The figures represent the amount of tax HMRC considers is underpaid. Not all its investigations will actually result in more tax being paid.’ It follows a harder stance on tax from the Treasury after a string of scandals including last year’s Panama Papers debacle, when it was revealed that thousands of well-known figures around the world were stashing their money in offshore havens.

In November Chancellor Philip Hammond announced plans to raise an extra £2billion by 2020 through a crackdown on tax avoidance.

The £25 billion tax hole  is enough to fund the NHS for three months, file photo

The £25 billion tax hole  is enough to fund the NHS for three months, file photo

Miss Self said the anti-avoidance efforts were aimed at squeezing employers so ordinary families did not feel the pinch.

She said: ‘The Treasury faces an unenviable choice – either cut public expenditure and services, or squeeze taxpayers for more money.

‘Increasing tax revenue through investigations is often the more politically palatable option, particularly when the focus is on large businesses.

‘However, HMRC is putting the affairs of more and more companies under the microscope as a result, increasing the costs for those businesses.’

A so-called ‘Google tax’ was introduced in 2015 to try to stop large firms shifting their cash to overseas havens, and big businesses will soon be ordered to publish their strategies for limiting payments to the Treasury.

Around two-thirds of all large companies are under investigation at any one time, and disputes can drag on for decades.

The amount eventually handed to the authorities is typically half of what was initially asked for.

Big businesses handed over a record £49.5billion of corporate tax in the last fiscal year, up 12 per cent on the previous 12 months.

A HMRC spokesman said: ‘Tax under consideration is not tax owed or unpaid, it’s an estimate of what might be at stake if we didn’t investigate.

‘By effectively enforcing the rules, HMRC has since 2010 brought in £53billion that would have otherwise gone unpaid and collected over £8billion from large businesses last year alone.’ 

Read more at DailyMail.co.uk


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