24 October 2008
By Julie Read
Too many large businesses are slipping through Revenue and Customs' net and failing to pay corporation tax, according to the Commons Public Accounts Committee.
R&C needs to set heavier penalties for these high-risk businesses whose tax shortfall is an estimated £8.5bn, according to the PAC's October 21 report, Management of large business corporation tax.
It said that, in 2005/06, two-thirds of the corporation tax raised was paid by just 50 of the 700 large UK businesses. Nearly 200 large businesses did not pay any corporation tax.
Edward Leigh MP, chair of the PAC, said: 'The fact that nearly 60% of the department's enquiries into compliance turn out to produce less than 1% of the additional tax raised constitutes poor targeting.
'It is extraordinary that there is no correlation between the resources R&C commits to each enquiry and the amount of corporation tax in question.'
The TUC demanded an international accounting standard for multinationals.
General secretary Brendan Barber said: 'The call from the PAC for a much more stringent approach to corporate tax avoidance is extremely welcome. Big business currently underpays its tax by £12bn each year and yet still lobbies for further cuts in corporation tax.'
PFoct2008
