Jessica Fino 30 Jan 2017 12:21pm

HMRC nets extra £2.6bn in corporate tax probes

HMRC raised an extra £2.6bn in revenue last year as a result of investigations into big businesses’ corporation tax, new figures have found

However, the total amount of additional corporation tax collected in 2015/16 was 25% lower than one year earlier, when HMRC managed to net an extra £3.5bn, law firm Pinsent Masons said.

Heather Self, a partner at the firm, said that the fall in the amount recovered from the investigations could be an indication of a "lower-risk" approach to tax planning amongst large corporates over recent years.

“Intense media scrutiny and high-profile clamp downs by HMRC have pushed aggressive avoidance strategies off the agenda for many large businesses,” she added.

The firm said that the decline could also be explained by lower corporate tax rates, which reduce the corporate tax take, as well as the complexity of some cases.

Self added, "We are seeing HMRC taking a more aggressive stance in relation to commercial transactions which were once seen as routine planning.

"The issues tend to be less clear cut, which can make them more difficult for HMRC to tackle.”

The report noted that HMRC and the Treasury are likely to be under pressure to show that they are taking a tough line with big corporates.

"It appears that HMRC is getting bolder at challenging the amount of profit of multinationals which should be allocated to UK economic activities.

“This is likely to result in higher corporation tax compliance yields in the future.”

The figures were collected from HMRC’s large business directorate, covering 2,100 of the country’s largest companies.