Business tax system defended

News Article - 22 May 2012
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Following figures published by the National Audit Office showing that a significant number of the UK's largest businesses did not pay corporation tax in 2005-06, HM Revenue & Customs (HMRC) has defended the tax system.

The study conducted by the audit office found that 220 out of 700 of the UK's biggest firms paid no tax in 2005-06, while a further 210 businesses paid less than £10 million in tax.

Responding to criticism, a spokesman for HMRC said: "Businesses are using the capital allowances and deductions that government has put in place to stimulate investment, create jobs and build economic stability."

Companies are not taking advantage of "loopholes", he added, stating that these are fully regulated "business reliefs".

Commenting on the situation, Bill Dodwell of Deloitte said the fact that larger companies are paying 54 per cent of corporation tax highlighted the "giant contribution" made by small businesses.

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