Inland Revenue's Tax Breaks For Big Business Revealed

by Robert Lee, Tax-News.com, London

25 July 2002

The Guardian reported on Tuesday that some 2,000 of the UK's largest corporations are being permitted to cut tax corners and escape Inland Revenue penalties.

Reporting on the government's 'new strategy of appeasement', the newspaper revealed that according to minutes of Inland Revenue meetings with the executives of multinational organisations, large companies based in the United Kingdom are often being excused from paying penalties when they are caught defaulting on corporate tax payments, and are being given 'special deals' which contravene tax policy.

The Guardian also alleged this week that the Inland Revenue is choosing 'not to examine in any detail' certain suspicious tax payments, and to cut corners in new laws designed to reduce international tax avoidance.

An unnamed Inland Revenue insider told the newspaper that the tax authority has come under increasing pressure from the government to increase the country's attractiveness for large multinational organisations:

'It may be very important to get business here, and tax may be part of that,' he observed on Tuesday. 'But you should have rules designed to work, instead of allowing the old rules to be bent or broken by specially favoured taxpayers.'

Norman Baker, Lib Dem MP for Lewes, and vociferous advocate of fairness within the tax system called this week for a Public Accounts Committee investigation into the conduct of the revenue department following the publication of the Guardian report:

'Why should ordinary wage earners, often on low income, pay their tax on time and in full when the grandest corporations and the richest individuals are apparently being allowed to get away tax free?' He asked, observing that: 'We're taking from the poor and giving to the rich.'

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