NAO warns HMRC over excessive tax probes

Large businesses are facing an inordinate amount of tax probes from HM
Revenue & Customs for relatively small amounts of money, the National Audit
Office has warned.

In its report, ‘Management of large Business Corporation Tax’, the NAO said
that despite HMRC’s attempts to target its interventions towards high risk
areas, it was still conducting too many investigations in low risk areas.

‘To implement fully its new approach, the Department must continue to embed
the necessary cultural and behavioural change in the everyday practice of its
staff,’ the NAO said.

The NAO said that in February HMRC was carrying out 4,700 inquiries of which
1,700 were five years old or more.

Large business paid £23.8bn in corporation tax in 2006/2007. This represented
54% of the £44.3bn in corporation tax paid by the 1.8 million business
incorporated in the UK.

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