In 2016, as part of the Government’s crackdown on tax dodging Parliament put in place a set of measures designed to “improve the behaviour of large corporations”.
The new rules would allow HMRC to put companies on the “naughty step” if they had been found to be persistently non-compliant. This was defined as “persistently failing to disclose information requested by HMRC, or being a serial abuser of tax avoidance schemes”.
It added that being placed into “special measures” could potentially have serious consequences. Companies could be named and shamed, or have a strict liability for any inaccuracies in their tax returns.
However, the think tank said it has asked HMRC how many companies had been put into special measures since the introduction of the measures and found the answer to be zero.
It said that in response to a Freedom of Information request, HMRC told TaxWatch that the threat of special measures meant that a “small number of companies” considered for action “immediately mended their ways, thus leading to no action being required”.
HMRC told TaxWatch: “The High Risk Corporates Programme, a key part of HMRC’s code of governance for resolving tax disputes, aims to simultaneously resolve tax risks and change customer behaviour.
“As part of this programme, special measures sanctions have been considered in a small number of cases where our large businesses demonstrate persistently uncooperative behaviours and engage in aggressive arrangements. Subsequent improvements in customers’ behaviour have removed the need to impose sanctions on these particular cases.”