Report Suggests That Inland Revenue Favours Multinationals

by Amanda Banks,Tax-News.com, London

18 October 2002

Writing in the Guardian newspaper on Thursday, columnist Nick Davies launched a stinging attack on the UK's Inland Revenue department, accusing it of mismanagement, concealment, and of failing to fully investigate infringements of the British tax code committed by multinational corporations 'because the government is too weak and scared to make them pay their taxes for fear that they will take their investment elsewhere'.

In a report entitled 'The scandal of our craven tax collectors', Mr Davies alleged that the Inland Revenue's failure to adequately ensure corporate compliance is costing the government more than £20 billion per year in uncollected taxes.

'As things stand, the evidence of favouritism towards multinational companies is alarmingly clear,' he argued, continuing: 'Guardian reports in July drew on the Revenue's own paperwork to show how it was agreeing 'not to examine in any detail' some corporate tax payments that were suspected of being faulty; giving special deals to chosen companies in breach of its own policy; cutting corners in new law that was designed to clamp down on multinational tax avoidance; and providing a general undertaking not to impose penalties in most cases where big companies were caught being fraudulent or negligent.'

Mr Davies went on to reveal that, following a response to earlier Guardian articles written by the head of the Inland Revenue, Sir Nicholas Montagu, in Tax Journal magazine, the Guardian had asked the Revenue chairman 'to tell us what penalties the 2,000 largest corporations had paid in the 12 months to March 2001.'

However, Sir Nicholas had not responded to the newspaper's queries by the time of going to press on Thursday, according to the Guardian article.

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