Inquiry · Opened 12 December 2025
Large business tax compliance
From: Public Accounts Committee
What this inquiry is asking
The PAC is investigating whether HMRC's large business tax compliance programme is working effectively. It's examining why the scheme delivers strong returns (£95 revenue per £1 spent), but also why powers to punish non-compliant businesses remain unused and the overall tax gap has grown by £2 billion since 2021 despite the regime's existence.
Status / emerging findings
- HMRC's co-operative compliance approach yielded £15.8 billion in 2024-25, more than double the £7.1 billion in 2021-22, but this may plateau as staffing costs rise
- Special measures powers introduced in 2016 to sanction large businesses have never been deployed, despite being designed to deter aggressive tax planning
- Corporation tax gap has risen £2 billion since 2021; tax under consideration for large businesses has nearly doubled from £42 billion to £70 billion
- Separate issues flagged: £1.5 billion in unclaimed child trust fund accounts and unresolved loan charge cases remain outstanding
Why it matters
HMRC collects £337 billion annually from 2,000 large businesses; if compliance powers aren't working as designed, the tax system may be failing to hold the largest corporate taxpayers accountable.
Tone arc
Inquiry opened with apparent confidence in HMRC's yields, but shifted to critical questioning: why are deterrent powers dormant, and is the compliance model truly effective if the tax gap still grows?
Themes
Key witnesses
John-Paul Marks (HMRC), Jonathan Athow (HMRC), Penny Ciniewicz (HMRC), Nicole Newbury (HMRC)
Reports & Government Responses
Report · 10 July 2026 · HC 86
Witness sessions
Oral evidence · 18 May 2026
Session 1 of 1
Written evidence & correspondence
Themes & actors
Topics across publication summaries
Top organisations & named entities
- HM Revenue & Customs (HMRC)·1 reference
- Committee of Public Accounts·1 reference
- Sir Geoffrey Clifton-Brown (Chair)·1 reference
- John-Paul Marks (HMRC First Permanent Secretary and Chief Executive)·1 reference
- Penny Ciniewicz (Director General for Customer Compliance Group, HMRC)·1 reference
- Nicole Newbury (Director for Large Business Compliance, HMRC)·1 reference
- Comptroller and Auditor General·1 reference
- UK large businesses (2,000 business groups)·1 reference
- John-Paul Marks·1 reference
- Sir Geoffrey Clifton-Brown·1 reference
Source · parliament.uk inquiry record ↗