Big companies underpaid £35.8bn in tax last year, HM Revenue & Customs fears
Big companies underpaid £35.8billion in tax last year, HM Revenue & Customs fears.
This is a jump of £1billion on the previous year, according to analysis from law firm Pinsent Masons, and the sixth year in a row that the shortfall has increased.
Scrutiny: Multinationals use several methods to artificially lower their UK tax bill
Multinationals use several methods to artificially lower their UK tax bill, such as classifying some employees as self-employed contractors. They also use transfer pricing – shifting costs and income across countries.
Base erosion – shifting profits from UK sales to lower-tax countries – is also employed.
Transfer pricing and base erosion account for more £9billion lost tax income.
Steven Porter, at Pinsent Masons, said: ‘Multinationals underpaying tax is one of the biggest areas of concern for HMRC. The Large Business Directorate is particularly effective at bringing in underpaid tax it identifies.