HMRC’s corporation tax yield up 25%
A combination of lower corporation tax and increased aggression from HMRC has seen a significant rise in yields
THE AMOUNT OF CORPORATION TAX HM Revenue & Customs collects from UK companies has risen 25% to £4bn, from £3.2bn, over the last 12 months.
Increased activity in preventing tax avoidance by large businesses and multinationals engaging in tax avoidance strategy has led to the rise, according to research conducted by law firm Pinsent Masons.
The government has pursued a policy of promoting the UK’s attractiveness to business by cutting the country’s corporation tax rate. It currently stands at 21%, and is due to drop to 20% in the new financial year.
That policy, though, has been accompanied by a more aggressive taxman, which has, Pinsent Masons claims, replaced a working relationship based on regular meetings between the HMRC’s customer relationship managers and companies’ heads of tax with visits by larger teams of inspectors. Those inspectors now seek to interview the CFOs, and even non-executive directors.
Pinsent Masons partner Eloise Walker said: “HMRC has turned up the heat on big corporates and in terms of increasing tax take that has worked.
“HMRC is very conscious of the public perception, however misguided that might be, that big companies get away with underpaying corporation tax and HMRC is keen to disprove that and show that it is doing its job.”