More than one in four big companies 'dodge' tax

More than one in four of Britain’s biggest companies avoid paying corporation
tax because of tax avoidance, tax relief or actual losses, according to a report
published today by the
Commons
Public Accounts Committee (PAC).

The report reveals up to 181 of Britain’s 700 biggest companies paid no
corporation tax in 2005-06, while 50% paid 67% of the large business corporation
tax.

Overall, HMRC raised £23.8bn in corporation tax from Britain’s big businesses
in 2006-07. £2.7bn was generated by
HM Revenue &
Customs (HMRC)’s corporation tax enquiries, of which 99% came from 40% of
the enquiries, prompting MPs to suggest HMRC improve the use of its staff to
better target businesses which posed the greatest risks of non-compliance.

Changes in the legislation have forced tax advisers to disclose, and users to
declare, any tax avoidance schemes. By February 2007, HMRC had received 900
disclosures of avoidance schemes, leading to the closure of 350 tax avoidance
schemes.