HMRC: Foreign firms responsible for almost a third of underpaid tax

Foreign companies are responsible for almost a third of underpaid tax in the UK, according to HMRC data analysed by Pinsent Masons. The law firm found that foreign-owned firms are responsible for around 32% of the under paid tax by large businesses in the UK, accounting for £11.5bn of the £35.8bn that has gone unpaid. Large US-owned businesses account for around 47% (£5.4bn) of the total underpaid by foreign-owned companies. Switzerland (£825m) and the Republic of Ireland (£674m) account for the next biggest totals. HMRC believes some large businesses are artificially reducing their tax liabilities by using transfer pricing, which sees business pay less corporation tax by charging an inflated price for services to its UK division. Pinsent Masons’ partner Steven Porter says HMRC is “aggressively” pursuing transfer pricing arrangements that it sees as artificial. “Reducing losses to the Treasury from transfer pricing and base erosion is a key target, both for HMRC and for the Government,” he added.

 

City A.M.

Related Post

Reeves urged to abolish the £175,000 residence nil-rate band The Chancellor is facing pressure to eliminate the £175,000 residence nil-rate band in her upcoming Budget. Rachel Reeves previously argued that this allowance, which costs around £2bn annually, primarily benefits the wealthy and now the Resolution Foundation is pushing her to scrap it. In 2011, she stated: “Raising the inheritance tax limit to £1m for […] By Lisa Brownlow, 18 September 2024
Read Now
Small firms responsible for 80% of tax evasion Analysis by the National Audit Office (NAO) shows that small firms are responsible for more than 80% of tax evasion. The report cites HMRC estimates that £5.5bn was lost to deliberate tax evasion in the 2022/23 financial year, with small businesses responsible for 81% of the total. Despite a reduction in the overall tax gap […] By Lisa Brownlow, 16 September 2024
Read Now
Threshold freeze creates 4.4m more taxpayers The number of people paying income tax has increased by 4.4m in three years due to the freeze on thresholds, according to HMRC data. The figures also show that the decision to freeze the personal threshold at £12,570 has pulled an additional 1.77m pensioners into the income tax bracket. There are currently an estimated 37.4m […] By Lisa Brownlow, 3 July 2024
Read Now
↑