Large business compliance: technical note
Published 17 July 2025
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HMRC’s approach to tax compliance for large businesses
HMRC’s Large Business Directorate works with around 2,000 of the UK’s largest and most complex businesses to make sure they pay the correct amount of tax at the right time. We subject the UK’s largest businesses to an exceptional level of scrutiny, formally investigating the tax affairs of around half of these customers at any one time. These investigations are based on our expertise and in-depth knowledge of large businesses, the sectors they operate in and the risks they present.
The department’s compliance strategy is to focus on the areas where there’s the greatest risk of tax not being paid.
With large businesses, the amounts of money involved, and the complexity of their tax affairs mean we take a resource-intensive approach. We assign a senior compliance professional called a Customer Compliance Manager (CCM) to each of the UK’s largest businesses. Their primary role is to make sure the business pays everything it owes. CCMs are experts in their field and build an in-depth knowledge of the business and the sectors it operates in. They are actively supported by tax specialists for all regimes and have direct access to data analysts, solicitors, audit specialists, trade sector experts and forensic accountants.
HMRC’s approach is in line with internationally recognised best practice and we continually enhance our cooperative compliance model through engagement with other fiscal authorities. This enables us to share best practice and work more efficiently with multinational enterprises (MNEs), as well as ensuring greater transparency and building public confidence in the integrity of both the UK and global tax systems. HMRC Large Business Directorate has developed strong links with counterparts in Australia, the Netherlands, the United States and Canada through the work of the Large Business 5 (LB5) engagement programme.
In 2024 to 2025, the Large Business Directorate achieved compliance yield of £15.8 billion, as shown in the table below.
Compliance yield for the Large Business Directorate in financial year 2024 to 2025
The following table shows the compliance yield generated by the Large Business Directorate during 2024 to 2025. The tax regime compliance yield is reported on the same basis as the Annual Report and Accounts.
Large Business Directorate
| Tax regime | 2024 to 2025 (£ million) |
|---|---|
| Corporation Tax | 6,149 |
| Excise | 698 |
| Income Tax | 62 |
| VAT | 5,289 |
| Other compliance interventions | 3,629 |
| Total | 15,827 |
Note: The technical note ‘Tax by different customer groups’ shows £19.7 billion compliance yield from activity undertaken in respect of customers in the large business customer segment. This includes compliance yield achieved by multiple HMRC Directorates. £15.8 billion reflects the proportion of compliance yield achieved solely by the Large Business Directorate.
Tax under consideration
Tax under consideration is an estimate of the maximum potential additional tax liability in each case before we have carried out a full investigation of the specific facts or analysis of relevant law. It is not actual tax either owed or unpaid, it is a tool to guide our enquiries to focus on the most significant risks that exist at any particular time with the largest businesses.
In many cases, when we have looked at the full facts, it becomes clear that there is some lesser liability, or even no further liability at all. Tax under consideration will naturally vary from time to time as outstanding issues are settled and new risks are identified.
The total is a snapshot of work in progress at a given point. Tax under consideration covers all taxes and duties, including Corporation Tax, VAT, PAYE and National lnsurance Contributions.
The following table shows a snapshot, as at 31 March 2025, of the tax under consideration figure for enquiries by HMRC’s Large Business Directorate, split by inaccuracy category.
| Inaccuracy category | Tax under consideration (£) |
|---|---|
| Accounting Standards | 143,496,083 |
| Alcohol Supply Chain | 112,020,869 |
| Avoidance | 1,125,926,753 |
| Bank Levy | 1,105,075,644 |
| Capital Allowances | 483,140,631 |
| Classification | 1,880,508 |
| Company Structure | 37,681,475 |
| Corporation Tax Capital Gains | 227,006,934 |
| Customs Special Procedures | 7,368,465 |
| Earnings | 213,195,953 |
| Employment Issues | 5,690,497,576 |
| Group Litigation Order | 3,095,095,229 |
| Intangible Asset Regime | 3,447,303,046 |
| International | 15,127,402,879 |
| Loss Relief | 1,474,236,671 |
| Management Expenses | 771,202,012 |
| Origin | 46,382,141 |
| Other Corporation Tax Issues | 62,497,160 |
| Other Issues | 2,037,624,010 |
| Partial Exemption | 1,245,116,296 |
| Petroleum Revenue Tax | 260,135,548 |
| Post Return Amendment | 373,103,524 |
| Refused Repayments | 1,390,732,749 |
| Registered Trader | 3,914,000 |
| Research and Development | 635,930,425 |
| Soft Drinks Industry Levy | 245,959 |
| Stamp Duty Land Tax | 76,926,173 |
| Trading and computations - Receipts and deductions | 2,947,847,126 |
| Valuation | 34,848,737 |
| VAT Error | 1,586,645,675 |
| VAT Legal Interpretation and Boundary Pushing | 8,839,281,967 |
| Total | 52,603,762,218 |
Note: From 1 April 2020, HMRC began the process of streamlining inaccuracy categories and this work is ongoing.
Figures that could risk identifying entities have been aggregated and provided as ‘other’ within the table.
The following table shows a snapshot, as at 31 March 2025, of the tax under consideration figure for enquiries by HMRC’s Large Business Directorate, split by country and based on the recorded location of the ultimate parent of each group of companies:
| Country | Tax under consideration (£) |
|---|---|
| Australia | 39,248,591 |
| Canada | 50,799,513 |
| France | 494,767,949 |
| Germany | 774,680,220 |
| Ireland | 125,113,314 |
| Japan | 85,984,664 |
| Netherlands | 582,346,517 |
| Other | 9,716,097,078 |
| Spain | 272,041,402 |
| Switzerland | 2,199,099,212 |
| United Kingdom | 29,112,939,435 |
| United States | 9,150,644,323 |
| Total | 52,603,762,218 |
Figures that could risk identifying entities have been aggregated and provided as ‘other’ within the table. ‘Other’ includes tax under consideration associated with multiple customers with UK and non-UK parented businesses.
The table below shows the recorded location of the ultimate parent of each group of companies covered by the Large Business Directorate, as of 31 March 2025.
| Recorded location of the parent of the group | Tax under consideration (£ billion) |
|---|---|
| UK | 29.1 |
| Non-UK | 14.9 |
| Associated with multiple customers with UK and non-UK parented businesses | 8.6 |
The following table shows a snapshot, as at 31 March 2025, of the tax under consideration figure for enquiries by HMRC’s Large Business Directorate, split by sector:
| Sector | Tax under consideration (£) |
|---|---|
| Alcohol | 444,092,946 |
| Automotive | 508,899,805 |
| Banking | 8,615,695,098 |
| Betting and Gambling | 721, 051,429 |
| Business Services | 1,849,220,800 |
| Construction | 432,442,412 |
| Insurance | 2,588,110,361 |
| Media | 703,390,448 |
| Oil and Gas | 3,879,235,572 |
| Other | 10,376,073,381 |
| Pharma and Healthcare | 4,580,011,294 |
| Real Estate | 461,074,170 |
| Retail | 7,032,396,646 |
| Telecommunications and Information Technology | 7,750,881,135 |
| Transport | 1,457,924,575 |
| Utilities | 1,203,262,146 |
| Total | 52,603,762,218 |
The classification is based on internal information on business sectors and ‘Other’ includes classifications which are not allocated to a particular sector, cross-sector businesses, sectors with fewer than 5 customers, or is disclosive.
The figures provided here cover all taxes, including Corporation Tax, VAT, PAYE and National lnsurance contributions.
Length of time taken to resolve enquiries involving large businesses
Around half of the UK’s largest businesses are under enquiry at any given time, often covering multiple issues and years. We record our enquiries into tax issues as ‘risks’ and, if a single issue covers multiple years, we record this as a single risk.
Risks cover all taxes and duties, including Corporation Tax, VAT, PAYE and National Insurance contributions. HMRC actively works open risks towards resolution and our statistics include those requiring litigation. Risks are recorded as closed when the issue has been resolved. The stock of risks will continuously change as risks are concluded and new risks are identified and opened.
By engaging with businesses in real-time, Customer Compliance Managers identify emerging tax risks and resolve tax disputes at the earliest opportunity.
Our stock of open risks is increasingly characterised by complex and novel areas of tax law, including instances where customers are challenging HMRC’s opinion of where legal boundaries lie, or can require litigation to conclude. These risks will typically take longer to resolve.
The average length of time taken to settle enquiries that concluded during 2024 to 2025 decreased from 21 months to 17 months. These figures include cases in litigation.
The decision point is where a risk is concluded or has entered litigation. In 2024 to 2025, the Large Business Directorate reached decision point on risks within 18 months in 81.57% of cases.
Customer Compliance Managers
The most cost-effective way of ensuring that large businesses pay the right amount of tax, is for our CCMs to manage their compliance, because of the amount of tax at stake, their size and complexity and the significant risk these businesses present to the Exchequer.
168 CCMs were working in the Large Business Directorate as at 31 March 2025.
Business Risk Reviews – BRR+
Introduced in October 2019, the Business Risk Review+ (BRR+) process is now business as usual for HMRC.
The BRR+ process rates large businesses based on their behaviour and strategy in relation to tax. Under the BRR+ process, companies are categorised as Low Risk, Moderate Risk, Moderate-High Risk, or High Risk.
The BRR+ process is designed to provide customers with clarity on where HMRC consider they sit on the compliance spectrum, and ensure a consistent approach is taken. The process includes HMRC:
- providing a granular narrative on their assessment of a customer’s position on the compliance spectrum, including a separate tax regime level assessment
- developing clear guidelines for improved compliance
- having a standardised approach
- setting clear expectations while adopting a deep, collaborative approach
BRR+ is a core feature of how we ensure approximately 2,000 of the UK’s largest businesses pay the tax they legally owe. They are carried out by HMRC CCMs. The CCM is supported by tax specialists in each of the relevant tax regimes.
The BRR+ process helps us focus our compliance resources where there is the greatest risk of businesses not paying the right amount of tax. It aims to encourage businesses to reduce their risk profile with HMRC, while enabling customers to effectively understand how their risk rating has been reached and what they can do to move to a lower risk rating.
BRR+ is enhanced by sectoral and customer understanding. This approach ensures HMRC can consider the risk of non-compliance across the large business customer population and identify where this is most significant.
The table below sets out the number of businesses assessed to one of four BRR+ risk rating categories:
BRR+ risk rating recorded between 1 April 2024 – 31 March 2025
| Risk rating | |
|---|---|
| Low | 385 |
| Moderate | 533 |
| Moderate-high | 80 |
| High | 8 |
Generally, a BRR+ is undertaken every three years with customers that are assessed as low risk, and at least annually for customers who are not low risk.
HMRC held Annual Conversations with 699 customers not receiving a BRR+ during the period 1 April 2024 to 31 March 2025, giving businesses the opportunity to discuss any developments and raise issues.
Around 90% of all Large Business customers had either a BRR+ or an Annual Conversation in 2024 to 2025. The number of BRR+s carried out in 2024 to 2025 was 1006, broadly similar to 2023 to 2024.
Uncertain Tax Treatment
The Uncertain Tax Treatment (UTT) regime requires large businesses to notify HMRC when they take a tax position in their returns for VAT, Corporation Tax, or Income Tax (including PAYE) that includes an amount which the legislation calls an ‘uncertain amount’.
Since 1 April 2022, approximately 2,300 large and mid-sized businesses with a turnover of £200 million and/or a balance sheet total of over £2 billion have been required to notify any uncertain tax treatment where there is a tax advantage of more than £5 million.
The UTT legislation intends to:
- help reduce the legal interpretation portion of the tax gap, by promoting early identification and disclosure to HMRC of tax uncertainties by large businesses in scope
- create a level playing field with low-risk customers who we expect to engage with us when they identify an uncertain tax treatment
- strengthen HMRC’s commitment to early engagement, by providing an exemption from the notification requirements where relevant information is provided to HMRC at an earlier stage
- promote fairness in the system, by requiring all uncertain tax treatments to be notified
- contribute to HMRC’s compliance strategy of seeking to work with customers in real-time
An uncertain amount exists if one or both of the following two notification criteria (or triggers) are met and create a tax advantage that exceeds a £5 million de minimis threshold.
- Provision – a provision is made in the customer’s accounts relating to a transaction to reflect that a different tax treatment may be applied to the transaction.
- HMRC’s known interpretation of the law – tax treatment relies on an interpretation or application of the law that is different to HMRC’s known interpretation or applications of the law.
Where customers identify an uncertain amount that is potentially notifiable, they can notify HMRC via their existing relationships with CCMs for the Large Business Directorate or the Mid-Sized Business Customer Support Team to obtain exemption from formal notification (‘pre-notification’). Alternatively, customers can make a formal notification through the UTT online portal.
UTT formal notifications and exemptions 1 April 2024 to 31 March 2025
The table below illustrates the breakdown and value of notifications and exemptions so far:
| Regime | Total pre-notifications | Total notifications | Value of reported tax advantage (£) | Criteria notified – known position | Criteria notified – provision |
|---|---|---|---|---|---|
| Corporation Tax | 0 | 7 | 237,591,800 | Fewer than 5 | Fewer than 5 |
| VAT | 0 | 0 | 0 | 0 | 0 |
| Income Tax-PAYE | Fewer than 5 | Fewer than 5 | Note | Fewer than 5 | Fewer than 5 |
| Total Value | Fewer than 5 | Note | Note | Note | Note |
Note: Figures which could be attributed to identifiable ‘persons’ have been suppressed.
Profits Diversion Compliance Facility
In January 2019, HMRC launched the Profit Diversion Compliance Facility (PDCF). The PDCF enables multinational enterprises (MNEs) using, or which have used, arrangements of the sort targeted by the Diverted Profits Tax, to review their arrangements. MNEs then put forward a report to HMRC, following our published PDCF guidance, with proposals to bring their UK tax affairs up to date and settle any liabilities due.
In the year to 31 March 2025 a panel of senior HMRC tax professionals continued to consider and agree the proposals put forward by MNEs in 17 separate reports.