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HMRC seeks greater share from US multinationals

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HMRC estimates it could recoup an additional £4.6bn from investigations into US multinational companies for 2017/18, according to figures obtained by Pinsent Masons through a freedom of information request.

Pinsent Masons obtained a country-by-country breakdown of HMRC’s ‘tax under consideration’ figure, which is an estimate of the potential yield from investigations still in progress.

The figure of £4.6bn represents a 17% share of the total £27.7bn tax under consideration identified by HMRC’s large business directorate at 31 March 2018, as stated in the 2017/18 report and accounts. In 2013/14, US companies accounted for 12% (£1.8bn) of tax under consideration. By 2016/17, this had risen to £3.4bn.

Swiss-based businesses account for the second highest proportion of 2017/18 tax under consideration (6%), followed by Ireland (3%) and France (2%).

The introduction of the diverted profits tax in 2015 has led HMRC to increase its investigations into multinational businesses. However, Jason Collins, partner at Pinsent Masons, warns that HMRC’s activity is not limited to multinationals, but rather ‘the affairs of all large businesses are under growing scrutiny. The amount of tax HMRC thinks was underpaid last year was a record high and it will be looking to act on this’

Commenting on the estimates of tax under consideration, Collins added: ‘often the large amount HMRC initially believes has been underpaid boils down to basic misunderstandings with businesses and past experience is that HMRC will only collect half the amount it initially sets out’.

Issue: 1440
Categories: News