Business
HMRC is investigating almost 800 major UK companies over suspected tax underpayments, while UK banks are suspected of underpaying £7.9 billion
![HM Revenue & Customs (HMRC) is actively investigating 791 of the UK's largest companies for suspected tax underpayments, a figure that represents nearly 40% of the country’s biggest businesses.](https://blogaid.org/wp-content/uploads/2024/08/HMRC-is-investigating-almost-800-major-UK-companies-over-suspected.jpg)
HM Revenue & Customs (HMRC) is actively investigating 791 of Britain’s largest companies for suspected tax underpayments, a figure that represents almost 40% of the country’s largest companies.
According to a Thomson Reuters survey, these investigations span critical sectors such as banking, telecommunications, pharmaceuticals, retail and oil and gas, underscoring HMRC’s increasing focus on ensuring tax compliance by large companies .
Ray Grove, Head of Corporate Tax and Trade at Thomson Reuters, highlighted the increasing importance of tax compliance in the current economic climate: “The scale of HMRC investigations into large companies demonstrates the growing importance of tax compliance. Slow global growth means many countries, including Britain, are considering tax investigations into big companies to help plug holes in their finances. This means more intensive supervision by the tax authorities and the expectation of more fines.”
The banking sector in particular is in the spotlight, with around 70 banks suspected of underpaying up to £9.3 billion in taxes as of March 31, 2024. This suggests that each bank is underpaying on average £132.5 million. Similarly, the retail and oil and gas sectors are under scrutiny, with HMRC estimating underpaid taxes at £5.5 billion and £3.9 billion respectively. For retail, this translates to an average of over £50 million per company, while for oil and gas companies it is £64.9 million per company.
The focus on banking is particularly notable as the sector’s tax liabilities have increased sharply, with the total value of taxes examined rising from £6.1 billion in 2018/19 to £9.3 billion in 2023/2024. Banks often face complex tax challenges, especially due to their dependence on third-party vendors for IT and other back-office functions, which are often located in different tax jurisdictions.
Grove further highlighted the increasing pressure on tax departments: “Amid increasing complexity in reporting and compliance standards, tax leaders are increasingly being looked to by their CFOs for strategic and operational advice. Companies must meet these increased pressures by investing in the right talent and technology in their tax departments to ensure they remain compliant and strategic in today’s rapidly evolving tax landscape.”
To address these challenges, Thomson Reuters has introduced innovative solutions such as Checkpoint Edge with CoCounsel, a generative AI assistant designed to streamline tax research. CoCounsel allows tax professionals to quickly navigate complex questions through a secure AI chat interface, drawing on massive databases of trusted Thomson Reuters content. This technology allows even junior professionals to efficiently conduct high-quality investigations, reducing dependence on the expertise of senior colleagues and helping companies stay at the forefront of compliance.
HMRC’s increased scrutiny serves as a stark reminder to major companies across all sectors: tax compliance is no longer just a legal obligation, but a crucial part of strategic planning and risk management.