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Press watch: Public tax row hardens HMRC attitude

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According to the Financial Times (26 May), the public row over alleged ‘sweetheart’ deals between the UK taxman and big companies has left some businesses struggling to resolve tax disputes in what one executive described as a return of ‘cops and robbers’.

A quarter of companies surveyed by Oxford University Centre for Business Taxation (OUCBT) said it was now harder to reach agreement with HMRC, a sign of strict adherence to internal guidelines that one business described as ‘an obsession with due process’.

Even though a majority of respondents described HMRC’s approach as reasonable, the research highlighted tensions over its litigation and settlement strategy (LSS). The LSS bars officials from compromises such as ‘splitting the difference’ in a disputed tax bill. But the researchers from the OUCBT suggested that ‘the attitudes and experience’ of the individuals involved could make a difference to the difficulty of negotiations.

John Vella, one of the researchers, said a small number of companies had reported that HMRC officials adopted ‘creative’ ways of complying with the LSS while reaching settlements they thought were in the public interest.

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