Talking to the taxman: £8bn clawed from big businesses

Laura Kuenssberg

Former Business Editor

Google has been criticised over tax. Credit: Martin Keene/PA Wire/Press Association Images

After months of terrible headlines about companies and rich individuals not paying their fair share, it was the taxman's turn this morning to do some of the talking.The HMRC invited in 'stakeholders' - tax advisers, charities and campaigners and the odd journalist to put their side of the story and unusually, put their top officials up to answer questions.

Despite all the noise and criticism they are clearly proud of what they do - they cite an extra £8 billion they say they have clawed back from big businesses by clamping down on legal tax avoidance and insisting they pay more. What doesn't often get mentioned here is that our tax system, they say, is often held up as model for other countries around the world.

Vodaphone has also been citicised. Credit: PA/PA Wire/Press Association Images

Our 'tax gap', a cool £32 billion of avoidance and evasion that is lost to the taxpayer is an amount that they claim essentially could be much, much worse. Nearly half of that is tax that goes unpaid illegally, avoidance that is lawful, but perhaps unfair, makes up only 12%, some £5 billion.

And as far as those companies who may push the rules to the acceptable limits go? HMRC now has 'customer relationship managers' who 'man-mark' the 2,000 biggest firms in the country. The notion of 'marking' them is their term not mine!

But while having to do the job, they're also having to make cuts; they will have 12,500 fewer staff by 2016. The current way of running things - one official said this morning - is 'unsustainable'.

The tax affairs of firms like Starbucks have been questioned. Credit: Johnny Green/PA Wire/Press Association Images

And it's not just that, but the tax system they're dealing cannot last. One official said it was 'designed in the 1930s', admitting it is easy for multinationals to design their companies in a way that keeps their bills down. All that said the Permanent Secretary, Lin Homer, told me that although she understands the frustration of the public at the amount some companies pay, the 'public is wrong' to think multinationals are running rings around the taxman.

By opening up today, HMRC was starting to try to show that is not the case. They have a lot of persuading to do, but perhaps have made a start.