HMRC’s large business directorate works with around 2,000 groups that:

• have an annual UK turnover of £200m or more; 
• have particularly complex tax affairs; or
• operate within a complex business sector.

Large businesses account for approximately two-fifths of the taxes that HMRC collects. HMRC takes a ‘cooperative compliance’ approach to managing tax risk with these businesses. Key to this approach is allocating a customer compliance manager (CCM) to each business. The CCMs are expected to have in-depth knowledge of and regular contact with the businesses they are responsible for. 

In its latest report, published in February, the NAO concluded that this approach offers good value for money and delivers benefits for both HMRC and large businesses despite being resource intensive. 

Key findings include that:

• the large business tax gap is on a long-term downward trend, falling from £7.5bn (1.7% of total theoretical tax liabilities) in cash terms in 2005-06 to £5.8bn (0.7%) in 2023-24, although it should be noted that figures can vary year-on-year;
• compliance yield (tax revenue collected or protected that would otherwise have been lost) approximately doubled to £15.8bn between 2021-22 and 2024-25. This represents a return on investment of £95 for every £1 spent on staff pay, compared to £25 for every £1 spent for HMRC’s compliance operations overall; and 
• large businesses hold more positive perceptions of HMRC than other taxpayer groups, driven by high levels of satisfaction with their CCM. In 2024, 91% of large businesses surveyed rated their overall relationship with their CCM as good.

The report also provides insight into HMRC’s plans to expand its cooperative compliance approach to more businesses, such as some of those currently managed by its mid-sized team. Work appears to be at an early stage, with HMRC yet to establish how many businesses to include, how best to identify them and how to adapt its approach to get the best results. 

In one of six recommendations made in the report, the NAO encourages HMRC to carry out “detailed planning and analysis” to inform its work, including “a cost-benefit analysis to assess different options”. 

ICAEW recommends that this includes analysis of the implications for businesses of moving to the cooperative compliance approach. Although there is good evidence that this works well for larger businesses, it could stretch the resources of other businesses. 

Further information

• HMRC's compliance approach for large businesses, GOV.UK