HMRC takes knife to big business service

HM Revenue & Customs is revamping its Large Business Service, removing
from the group those companies that it does not regard as the largest in the UK
and including others on the list.

Tax advisers said that a revamp of the service had resulted in some companies
being dropped from the list of largest businesses.

The government has been revamping the service over the last few years.

While 2,500 businesses originally had some or part of their tax affairs dealt
with by the Large Business Service, now only 750 will have all of their tax
affairs dealt with by it.

Advisers said that the move brought together two trends: the tendency to deal
with all a company’s taxes on a one-stop-shop basis as well as new size

However, it remained unclear this week how many businesses would be moving
around purely on the basis of their size.

‘The position where businesses are in LBS for some taxes but not all, is a
historical situation, caused by the merger of Inland Revenue and Customs &
Excise, whose “large business” criteria differed, resulting in the newly created
LBS taking on the existing business populations of each of the large business
units of these organisations,’ a spokeswoman for HMRC said.

The new rules define which companies are looked after by the Large Business
Service as those with a turnover of £600m or above, or those that have an asset
threshold greater than £2.5bn.
Any companies below the threshold will be dealt with by the local compliance

The move to streamline the system has been welcomed by tax experts, although
there are fears about the standard of service which businesses transferred from
the Large Business Service to local compliance will receive.

‘I think there is general support for the move,’ said Bill Dodwell of
Deloitte. ‘It was confusing in the past, and having all your tax affairs dealt
with by a single office will help businesses.

‘The question I hear from businesses is, will local compliance be able to
pick up fully the ones being moved out of the Large Business Service? Everyone
looks admiringly at LBS, but there are question marks over the large and complex
part of local compliance.

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