Chronic large business underpayment to be put to bed by HMRC

Industry news roundup: week ended 27 Feb 2014:

Her Majesty’s Revenue & Customs has finally had it with larger businesses getting away with murder when it comes to underpayment on their tax burdens.

In fact, the largest firms operating in the UK have most likely resulted in the loss of up to £442 million in tax revenue according to Pinsent Masons. This is even more than it was last year, when HMRC’s Large Business Service found there was just £282 million in mysteriously missing tax payments.

Well, these rising figures have finally proven to be too much for the taxman, and now there’s a growing movement to challenge any firm that’s using a bit of loose accounting rules to reduce their tax liabilities. It’s a serious step to come right out and inform a company that they’re doing it wrong, industry experts say, even when you’re HMRC, so for the tax authority to finally come out and commit to knocking a few heads together is a very serious step towards getting these large sized firms into shape.

Speaking of large firms in accounting troubles, security giant G4S is in some serious hot water when it comes to its accountancy practices. A former employee of the company has leveled accusations that the profitability of the firm was understated through accounting sleight-of-hand.

This isn’t the first problem that G4S has faced recently. The Government is already under investigations for a tagging contract that it might have overcharged the Government for by a margin of millions – £24 million in fact. Now the Serious Fraud Office gets to add an investigation into an additional £4 million internal charge that G4S might have cooked up in order to make it appear less profitable than it actually was.

Now you see this is exactly the kind of behaviours that I’m talking about when I refer to large firms playing fast and loose with accounting rules in order to minimise their own tax liability. Luckily it doesn’t take much for the truth to come out, especially when you’ve got whistleblowers coming forward to drag firms like this out into the light and Government officials demonstrating a renewed and stalwart desire to get their pound of flesh from companies who thought they were too smart to get caught. These arrogant companies need to be put in their place!

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