Tulip Siddiq – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Tulip Siddiq on 2016-05-04.

To ask Mr Chancellor of the Exchequer, with reference to paragraphs H.2 to H.6 of HM Revenue and Customs document, Measuring tax gaps 2015 edition: methodological annex, published in October 2015, what the initial estimate was of the value of large business tax under consideration (a) in total and (b) for each tax to which large businesses are subject in each year since 2009-10; how many times those estimates were revised (i) up and (ii) down in each such year and for each such tax; and what the total revised value of large business tax under consideration was after HM Revenue and Custom’s negotiations with those businesses.

Greg Hands

Tax under consideration is HM Revenue and Customs’ (HMRC) estimate of the maximum potential additional tax liability in each case, before they have carried out a full investigation of the specific facts or analysis of relevant law. It is not actual tax either owed or unpaid; it is a tool to guide HMRC enquiries to focus on the most significant risks that exist at any particular time with the largest businesses. In many cases, when HMRC have looked at the full facts it becomes clear that there is some lesser additional liability or even no additional liability at all. Tax under consideration is a snapshot of work in progress and will naturally vary from time to time as outstanding issues are settled and new risks are identified. Tax under consideration covers all taxes, including Corporation Tax, VAT, PAYE and National lnsurance contributions. As it is an internal estimate used within HMRC, it is not subject to challenge by large businesses.

Until 31 March 2014, HMRC’s Large Business Service dealt with the tax affairs of around 800 of the largest businesses in the UK. From 1 April 2014 HMRC’s Large Business directorate deals with the tax affairs of around 2,000 large businesses.

Snapshots of tax under consideration in each year were:

HMRC’s Large Business directorate (largest 2,000 businesses):

31 March 2015 – £19 billion

HMRC’s Large Business Service (largest 800 businesses):

31 March 2014 – £15.7 billion

31 July 2013 – £18.8 billion

31 July 2012 – £21.3 billion

31 March 2011 – £25.5 billion

31 March 2010 – £33.4 billion

The estimate of total tax under consideration shown in Measuring Tax Gaps Table 7.1, page 62, differs from the figures above for two reasons:

• it shows tax under consideration for the individual financial years relating to liability

• it includes corporation tax only.