Businesses are facing prolonged delays in tax investigations conducted by Her Majesty’s Revenue and Customs (HMRC), with some cases taking up to eight years to reach resolution, according to a report released by the Public Accounts Committee (PAC) on Friday.
The committee’s report highlights a significant increase in the duration of HMRC tax inquiries, particularly those involving court disputes. Investigations related to legal proceedings now average eight years and one month, nearly doubling from the four years and nine months recorded in 2019-20. The extended timelines have raised concerns about the inefficiency of the current process.
While the PAC acknowledged that the complexity of the tax code and the volume of information requested from large businesses contribute to delays, the committee identified the broader judicial system as a substantial factor. The slow pace of court proceedings in the United Kingdom, described by the report as “creaking,” limits HMRC’s ability to expedite cases dependent on litigation. Nonetheless, the committee pointed out that even investigations not involving court action took an average of 17 months to conclude last year, which it deemed excessive.
The findings are part of a wider examination into the tax compliance of multinational companies operating within the UK. The PAC urged HMRC to develop and share concrete plans aimed at reducing the time taken to complete investigations, emphasizing that protracted cases can undermine taxpayer certainty and compliance.
In response, an HMRC spokesperson underscored the department’s commitment to ensuring multinational enterprises pay their legally owed taxes. The spokesperson noted that the UK continues to lead internationally in this area, highlighting that HMRC’s efforts brought in an additional £14.9 billion in tax revenue last year.
The report comes amid ongoing scrutiny of tax enforcement efficiency and the need to balance thorough oversight with timely resolution to maintain confidence in the tax system.
