HMRC tax investigations take too long

In a concerning trend, HMRC’s tax investigations into the UK's largest businesses now average 45 months, indicating a serious issue for both the tax authority and the businesses involved, as highlighted by research conducted by multinational law firm Pinsent Masons. Around half of the approximately 2,000 largest businesses covered by HMRC’s “Large Business Service” are under formal investigation at any given time, resulting in around 2,000 separate cases still open, some for four years or more. Bryn Reynolds, Partner (non-lawyer) at Pinsent Masons says that long-running investigations by HMRC can be a significant burden on even the biggest businesses, creating financial uncertainty and consuming senior management time.

Says Bryn Reynolds “HMRC need to be more rigorous in closing long running cases down. Having cases running for three, four or five years should be the exception rather than the average.” The UK government has pledged additional funding to HMRC for recruiting more tax officers, intending to improve tax collection and reduce unpaid liabilities, yet concerns remain about whether these increased resources will lead to faster resolutions given HMRC’s existing internal delays and cautiousness in closing cases. Bryn Reynolds adds “The increase from 6th April 2025 in the interest rate for late payments to 8.5%, the highest since December 2007, means that the consequence of long running disputes could result in a significant interest charge even where a mistake has been made despite taking reasonable care.”