HMRC's relationship with large business
The tax affairs of large businesses are inherently complex, requiring more interaction with HMRC than is usually the case for other taxpayers. But, when business and HMRC work collaboratively on a real-time basis it delivers significant benefits for both parties.
For HMRC, the resolution of issues before tax returns are filed ensures the right amount of tax is paid at the right time, improving cash flow for the funding of vital public services, and avoiding costly post-filed return investigations. For businesses, real-time working provides greater clarity over their tax position, reducing the risk of unpleasant surprises later down the line. It also frees resource from lengthy and administratively burdensome investigations, so that firms can get on with the business of contributing to the UK's economic growth.
There is a range of views on the current state of the relationship between large businesses and HMRC, some businesses are very positive about their relationship with HMRC and would not want to change it. However, in recent years a growing number of businesses are reporting a steady breakdown in their relationships with HMRC. Many now say that collaborative working has become a one-way street, where firms submit information and receive little back. With this breakdown in relationship, the benefits to both sides diminish.
It is important to consider that this decline in satisfaction among some businesses is from a very high starting level. The international business community has long recognised HMRC as a world-class, well respected tax authority which maintains excellent relationships with business taxpayers. This is driven by its reputation for integrity and reliability meaning business can trust that their tax affairs are being treated with confidence and in a fair way. But the veil of fog that seems to have appeared for some businesses means that, for the UK to remain open for business and to retain its reputation as a well administered tax system, HMRC now needs to press the reset button on the commitment to co-operative compliance. We are grateful to HMRC for their openness and willingness to listen and understand business concerns on this issue so far.