The amount of extra tax the Government took from enquiries and interventions rose 13 per cent in 2007/08 to £12.9 billion, according to calculations by UHY Hacker Young, the Birmingham accountancy firm.
In some areas the increase was even more marked, with HM Revenue & Customs pulling in 44 per cent more corporation tax from compliance activity targeting big businesses, up from £2.7 billion to £3.9 billion in 2007/08.
According to UHY Hacker Young, the extra tax resulting from compliance activity is partly due to the more aggressive approach adopted by HMRC towards tax collection, which is likely to harden still further as pressure mounts on HMRC to prop up falling tax revenues during the downturn.
The firm said that the growing complexity of the tax system, which is leading to more mistakes on tax returns, combined with more sophisticated risk profiling techniques developed by HMRC, are other factors contributing to the rise.
Partner Malcolm Winston said: “HMRC has taken a steadily more aggressive stance on reducing non-compliance over the last few years. Tax compliance teams have received significant increases in resources in recent Budgets and are now far less likely to negotiate with taxpayers and settle out of court if litigation will net more tax.
“While the Government’s conventional tax take is falling short it definitely seems to be trying to compensate for this by squeezing more money out of tax investigations.
“The tax system is becoming ever more complex due to the raft of new anti-avoidance measures and the wider use of tax credits. This is resulting in growing areas of potential dispute on tax returns as it has become more difficult for taxpayers to assess accurately the amount of tax they owe.
“With tax receipts forecast to fall in 2009, HMRC may well become even more aggressive in its pursuit of revenue. HMRC has always been one of the main instigators of bankruptcies and liquidations, but with taxpayers suffering in the current climate, there is mounting pressure on it to adopt a ‘light touch’ approach.”
“HMRC is really cranking up its activity targeting larger companies. This is a difficult balancing act because if the climate in the UK becomes too unfavourable more multinationals will relocate offshore, potentially damaging corporation tax receipts longer term.”