HMRC manages tax disputes with large firms satisfactorily

Accountants in London may be interested to learn that the National Audit Office has discovered that HMRC has sound governance in place when it comes to managing tax disputes with large organisations.

The NAO has been reviewing HMRC’s performance for the last financial year and it found that the Revenue is investigating in excess of 2,700 issues involving the UK’s largest organisations and there could be up to £25.5 billion at stake.

The Revenue’s processes for sorting out tax disputes with large organisations were deemed adequate and it complied with sound governance arrangements in the vast majority of its investigations.

However, it was discovered that in three of the largest cases, one or both of the Revenue’s commissioners had signed off a settlement after they had participated in negotiations and this reduced the assurance to taxpayers that appropriate settlements had been reached.

Amyas Morse, the head of the National Audit Office, said there must be demonstrable separation between people negotiating settlements and those approving them if external and internal shareholders were to have confidence in the process.

It was also reported that HMRC has made significant process when it comes to stabilising the administration of PAYE and by the end of next year it should have cleared up all legacy issues.

HMRC received £468.9 billion in the last financial year, an increase of 7.6% on 2009-10. About £13 billion of this is attributed to the rise in VAT, whilst income tax and National Insurance receipts increased by £5 billion and receipts from corporation tax by £8 billion.

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