The Large Business Office, the department which chases non-compliance from multi-national companies, revealed revenues of £1.5bn compared to £2.1bn in 2000/01.

According to Sir Nick Montagu, chairman of the Revenue, the figures do not reflect his change in approach. 'There is absolutely no question of our letting up on compliance,' he told AccountancyAge.com. 'The LBO recently did a survey of its customers which said that the Revenue has actually got tougher with large corporates.'

He went on to say you have to take year-on-year results with a pinch of salt.

'You've got to put this in context,' he said. 'In 2000/01 the ten highest yielding adjustments contributed £663.5m, and exceptionally, included three cases which yielded £100m or more.' In comparison, the top ten cases in 2001/02, only yielded £232m. 'Don't judge it year-on-year,' he said.

He also mentioned the huge increase of concentration on tax avoidance. 'Very recently we got wind of an avoidance scheme [involving interest swabs] that would have involved a tax loss of at least £100m. Within days we had alerted ministers and they announced that they would legislate in the 2003 Budget, backdated to the date of the announcement. We nipped it completely in the bud.'

Some of the problems could also be down to the attitude of some of the Revenue's investigators who have not taken on the new approach of 'enabling' tax compliance. 'I do think that there are some [investigators] who, perhaps, take what was an old-style Revenue view, that evasion is to be found everywhere.'