As the FT notes this morning:
The amount of additional corporation tax collected through investigations into Britain’s largest businesses has fallen to its lowest level since 2006-07, according to data which show that inquiries into some of the UK’s 770 biggest companies yielded just over £3bn in the year to March.
All the usual excuses are rolled out from HMRC before it is noted that:
The large-business service, which deals with the 770 largest businesses, collected an extra £3.17bn in tax in 2012-13, an 8 per cent drop from £3.44bn the year before — and a 25 per cent drop on 2010-11. Extra revenue gained from challenging large businesses over how much corporation tax they pay peaked at £4.1bn in 2010-11.
Let me suggest the two real reasons for the change.
The first is a lack of resources.
The second is a lack of political will: you can't run a tax haven and then frighten business away by being aggressive.
Oddly, neither are mentioned by HM Revenue & Customs in the explanations they provided to the FT. And so the tax gap will keep on growing.