Enews – 13 March 2026

In this week’s Enews, we look at the additional tax raised by HMRC’s large business directorate. We also have news on the removal of tariff exemptions and a warning over the threat to standards posed by war in the Middle East to update you on.

• HMRC investigations doubles additional tax from large businesses
• Fears over low value imports reform
• Growth in living standards threatened by war in Middle East

HMRC investigations doubles additional tax from large businesses

HMRC’s large business directorate has doubled the amount of tax revenue it collects, according to the National Audit Office (NAO).

A hands-on approach to tax compliance for large businesses yielded £15.8 billion during 2024/25. That is double what the unit collected in 2021/22.

The large business directorate has a return on investment of £95 for every £1 spent on staff pay, which is four times higher than HMRC achieves across all taxpayers.

The tax gap for large businesses has steadily decreased over the long term, from £7.5 billion in 2005/06 to £5.8 billion in 2023/24.

Since 2006, HMRC has put 70 large businesses through its High Risk Corporates Programme, designed to tackle its most complex or riskiest cases. This has brought in more than £32 billion in extra tax.

The NAO recommended that HMRC expands the hands-on approach with other businesses as well as improving its IT systems.

Gareth Davies, Head of the NAO, said:

‘Through its large business directorate, HMRC has developed an efficient and effective approach to ensuring large businesses remain tax compliant. This has made a significant contribution to reducing the tax gap.

‘HMRC should continue to explore whether this approach could usefully be extended to other complex and high-risk businesses.’

Internet link: NAO website

Fears over low value imports reform

Removing the UK’s tariff exemption for low value imports could risk pushing up prices, harming small businesses and reducing trade intensity, warns the British Chambers of Commerce (BCC).

The government is considering the move after the US removed its ‘de minimis’ exemption. The EU has also said it will do the same and introduce new handling charges for cheaper packages as well.

A government consultation into the plans closed on 6 March and the BCC has submitted a response.

It said that while the UK must respond to action by the US and EU, to avoid unfair competition from cheaper goods flooding our domestic market, any reforms must be proportionate.
 
William Bain, Head of Trade Policy at the BCC, said:

‘We know the trend globally is to abolish de minimis thresholds and levy duties on low value imports given their huge growth in recent years.

‘The US has scrapped its de minimis threshold, and the EU is planning new charges on cheaper imports from July this year. This will put our exporters’ sales under pressure, and we must respond to ensure we have a level-playing field.

‘But we would urge Ministers not to introduce charges per item or consignment by import. Our research shows the increased costs will feed through into higher prices.

‘The government should also retain VAT being charged at point of sale on transactions for these purchases – a practice followed by many countries in global trade. Its retention would avoid unnecessary complications and additional friction on cross‑border e‑commerce sales.’

Internet link: BCC website

Growth in living standards threatened by war in Middle East

The UK is set for a decent increase in living standards this year, but energy price shocks caused by war in the Middle East threaten that growth, according to the Resolution Foundation.

The think tank says the improvement in living standards would be a one-off and would particularly benefit lower-income families.

However, the medium-term picture for living standards remains bleak, it adds.

The Foundation says living standards for typical working-age families are set to grow by a decent 0.9 per cent, or £300, over the coming year.

However, the think tank says this good news risks being overshadowed by the domestic fallout from events in the Middle East. If recent rises in the price of oil and gas were sustained, they could add around a percentage point to inflation and £500 on to typical annual energy bills, it adds.

Ruth Curtice, Chief Executive at the Resolution Foundation, said:

‘This coming year is set to be a decent one for living standards, and a bumper one for poorer families, as wages and benefit support rise above the level of inflation. But a fresh energy price shock risks puncturing this good news.

‘With wage growth set to tail off, the living standards picture for the rest of the Parliament is bleak. This should remind policy makers of the need to both navigate near-term uncertainty and support productivity-based economic growth over the medium term. That is the only way to meaningfully lift living standards throughout Britain.’

Internet link: Resolution Foundation website