Foreign firms get no special tax treatment, say lawyers
FOREIGN-OWNED firms are linked to almost half of HMRC’s investigations into large companies’ tax bills, according to lawyers.
Pinsent Masons reckons the figures rubbish claims that revenue-collecting authorities adopt a light touch approach to chasing inwardly investing companies for their tax contributions.
HMRC investigates levels of tax that the 770 largest businesses in the UK may still have to pay, along with the risk to the Exchequer from companies litigating over amounts of tax they have overpaid.
From March last year HMRC had identified £25bn at risk, of which £11bn concerned foreign-owned companies, Pinsent Masons claims – meaning that 44 per cent of the total could involve negotiations with inward investors to the UK.
“HMRC actively targets foreign-owned companies within the UK to see if they owe any extra tax,” said the law firm’s head of tax Jason Collins.
“There is a popular myth that HMRC and the Treasury are so easily charmed by the presence of foreign companies in the UK that they are happy to accept any tax payment that they get. That could hardly be further from the truth.”
The current regime can even deter foreign companies from investing in the UK, Collins added. “The enquiries to which HMRC subjects these companies can be incredibly tense, time consuming, and, at times, confrontational.”