Brexit: Large UK corporations suspected of underpaying more than £25m in taxes
Large UK corporations have been suspected of underpaying £25.3m in post-Brexit import duties from the EU.
Research from multinational law firm Pinsent Masons showed that the amount of taxes under consideration by the HMRC has increased by 97.5 per cent in the year ended 5 April, going up from £620,000 in 2021.
“The amount of tax HMRC thinks big businesses are underpaying so far on EU imports might just be the beginning,” commented Pinsent Masons’ partner Steven Porter.
“Given the significant volume of goods that arrive in the UK from the EU, HMRC clearly sees this as an emerging area of tax risk.”
Morning Wire understands that taxes under consideration do not equate with taxes owed or unpaid, as taxes under consideration are an estimate used by the HMRC to deploy resources.
Tax positions are only known after investigations have been carried out, meaning that additional taxes might be less than those initially believed.
The jump comes on the heels of Brexit-related rules on imports coming into force in early 2022.
Under Brexit’s rules of origin, anything imported from the EU to the UK needs to be wholly or largely originated in the EU.
After a year-long grace period, from January companies need to prove the origin of goods otherwise they risk having to pay higher import rates.
Commenting on the research, Pinsent Masons’ partner Totis Kotsonis said the extra rules have led to a “less than ideal” situation for UK businesses, which have been accustomed to “seamless trading with the EU’s single market.”
Morning Wire has approached British Chamber of Commerce while the Confederation of British Industry has refused to comment.