Background to the report

HM Revenue & Customs’ (HMRC’s) large business directorate works with around 2,000 of the UK’s largest business groups to ensure they comply with tax rules. This covers most groups with an annual turnover in the UK of more than £200 million, and those which HMRC considers have particularly complex tax affairs or are operating in a complex business sector.

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Around two-fifths of the taxes that HMRC collects come through large businesses, including those that large businesses pay directly and those they pay on behalf of their employees and customers. Their size means they are in regular contact with HMRC, with it investigating around half of all large business groups at any one time.

Given the complexity of the businesses, and the scale of the tax revenues involved, HMRC takes a more hands-on approach with large businesses than with other taxpayers. It divides the large business population into 19 business sectors so that teams can focus on the issues facing each sector. The large business directorate has approximately 2,500 full-time equivalent staff, costing £166 million in staff pay in 2024-25.

Scope of the report

This report examines whether HMRC’s approach to large business tax compliance is delivering value for money. It covers:

  • the taxes paid by large businesses;
  • HMRC’s approach to working with large businesses;
  • the effectiveness of HMRC’s approach.

We designed our work to test the effectiveness and productivity of HMRC’s approach, with our focus on the work of the large business directorate. We have not examined in detail how each of the tax regimes affecting large businesses operate, nor the rules determining how much each business should pay. We have not examined the amount of tax paid by individual businesses, nor whether these amounts are correct.

Video summary

Louise Bladen, the report’s director, summarises our findings.

Conclusions

There is little doubt that HMRC’s compliance work with large businesses offers good value for money. HMRC collected £337 billion in taxes from large businesses in 2024-25, including those taxes that large businesses pay directly and those they pay on behalf of their employees and customers. Large businesses also carry particularly significant tax risks, and so HMRC’s enhanced focus on them through a separate directorate makes sense.

Large businesses rate their experience of dealing with HMRC highly, relative to other customer groups, and the size of the large-business tax gap, relative to revenue, is low. The collection of £15.8 billion in additional taxes by this directorate, bringing in £95 for every £1 spent on staff pay – four times more than what HMRC achieves across all taxpayers – represents good return on investment. HMRC’s performance, in terms of the taxes its compliance activity brings in and the time it takes to resolve interventions, has recovered to pre-pandemic levels.

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Publication details

Press release

View press release (27 Feb 2026)

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