Taxman rushes to defend big business

The taxman has run to the defence of big business this week after it emerged that close to a third of the UK’s 700 largest companies were not paying a penny in corporation tax.

An NAO report, ‘HMRC: Management of large business corporation tax’, revealed that almost 33% of the country’s big businesses paid no tax, with a further 30% paying no more than £10m a year.

The taxman was quick to rubbish claims that large companies were not playing fair.
‘It is ridiculous to suggest that business does not pay its fair share of tax. Businesses are using the capital allowances and deductions that government has put in place.

‘These are not loopholes ­ but are properly policed business reliefs,’ an HMRC spokesman said.

There are several reasons why companies would not have taxable profits, including making a loss or making pension fund payments.

J Sainsbury has received a £9m tax credit after pumping £350m into its pension funds in 2005/06 and 2006/07.

Some have suggested the findings would intensify the debate on how multinationals and private equity-owned companies manage their tax.

Further Reading:

Read the NAO report

Almost a third of Uk business pays no tax