On 25 August 2016 HMRC published the Large Business Survey 2015. The survey asked large businesses about various aspects of their relationship with HMRC. A telephone survey was conducted with 932 Heads of Tax and Directors of Finance of large businesses and this was followed up by 20 qualitative interviews conducted face to face.

Customer experience

Generally large businesses gave a positive response on their experience of dealing with HMRC in 2015. 82% of large businesses rated their overall experience as good, a result that is consistent with the findings for the previous year. Businesses also generally considered that HMRC treats them fairly, is looking for a cooperative relationship with them and ensures queries are dealt with effectively. Only 65% of large businesses considered that HMRC provides the business with certainty in their tax affairs and only 56% considered that there is good coordination within HMRC in relation to their tax affairs.

In terms of wider customer experience only 58% of the large businesses considered that HMRC’s current ways of interacting digitally with the business meet their needs. Only 48% of businesses considered that the overall administrative burden on the business relating to tax compliance is reasonable.

Most of the businesses in the survey had been subject to a risk review in the last three years and most of them were positive about this process. Around 79% of the businesses agreed that the risk review process is fair and 81% were clear about how HMRC came to a decision about the risk rating. 81% agreed that being classed as low risk by HMRC would be of benefit to the business.

Customer Relationship Manager

Most of the large businesses had dealt directly with their Customer Relationship Manager (CRM) in the previous twelve months. Most of the businesses rated the CRM highly for professionalism and ease of contact. 84% of the businesses considered the CRM ensured queries were dealt with effectively and 83% considered that the CRM provided access to tax specialists within HMRC when necessary.

Attitudes to risk

Of the surveyed businesses 78% considered they had a low appetite for risk in relation to tax planning and of these 37% considered they had a very low appetite. Only 3% considered that they had a high appetite for risk in tax planning.

65% of the large businesses agreed that they are always open to ways to legally reduce their tax payments, compared to 74% from 2014. 21% considered that tax avoidance is acceptable, down from 26% in 2014. 8% of the large businesses agreed that they look to reduce tax liabilities through recognizing profits in more favourable tax regimes, down from 12% in 2014. Half the large businesses in the survey considered that there had been increased scrutiny of tax planning measures by the senior level of their business throughout 2015.

Impact of policy

Of the large businesses surveyed 97% were aware of the corporation tax cut from 20% to 18% by 2020. 79% were aware of the increase in the Annual Investment Allowance (AIA). However only 52% were aware of the changes involving value added tax and prompt payment discounts. 60% of the businesses considered that the corporation tax changes would have a positive impact on their competitive position; 34% considered that the AIA increase would have a positive impact and 9% considered that the changes to VAT would have a positive impact on them. Most of the other businesses considered that the effect of these measures would be neutral. 42% of the businesses reported a benefit from the Research and Development Expenditure Credit. Around 60% noted that their senior leaders were now more aware of the tax benefits of research and development (R&D); 40% said that their business had elected early into RDEC; and 20% had been influenced by the tax credit in their decision to carry out more R&D.

Use of agents

Almost all the large businesses used agents to receive advice on transactions or operational decisions. 80% of the businesses considered that using the agents resulted in fewer errors in their tax computations. Around 38% reported that using agents had caused them to implement tax strategies they might not otherwise have considered and around 3% stated that the use of agents resulted in disclosure of less information to HMRC.