Legal firm, Pinsent Masons has carried out research that reveals that 44% of the large companies HMRC are pursuing for underpaid corporation tax are controlled overseas.
The Revenue has identified £25bn for the year ended 31st March 2011 as being tax revenues at risk from all large companies in the UK, with around £11bn of that being attributable to foreign-owned companies.
It is the responsibility of the Revenue's Large Business Service to rake in taxes payable by the 770 largest businesses in the UK and they will also be charged with securing the £11bn outstanding from overseas controlled companies.
Pinsent Masons head of tax, Jason Collins, believes that the statistics indicate that HMRC is taking a much tougher line over large company corporation tax than has been reported by the media, such as Apple and Amazon. The common perception perpetuated by the press that HMRC and the Treasury are happy to strike deals with foreign companies over taxes appears to be a falsehood.
Whilst the UK may be heading towards a more competitive rate of corporation tax, Mr Collins says that before the country can fully benefit from that it must prove to overseas companies that HMRC's compliance work is not unreasonably burdensome. If it is felt that our tax authorities are too strict then this could put off businesses seeking to trade in the UK.
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