This is without any checks on whether they owe any tax.
Another million plus companies never submit any corporation tax return, adding to a potential tax loss of £16 billion each year to the treasury, according to tax expert Richard Murphy, who advises the Public and Commercial Services union.
The extraordinary figure is revealed by Mr Murphy, who runs Tax Research and has raised the matter with David Gauke, the Treasury Minister responsible for the agency. His response, without any checks being made, is that it should be assumed that they must be dormant non-trading firms.
The minister was recently awarded “Tax Personality of the Year “ by a panel of taxation experts who praised his knowledge of the system – an award celebrated at this year’s Conservative Party conference in Manchester.
Details of the research by Mr Murphy show that in 2009-10, the last full year for which figures are available, some 500,000 companies disappeared from the register at Companies House.
Of these, some do notify Companies House they have ceased trading. But in that period over 325,000 did not
and Companies House has just automatically struck them off without investigating the circumstances.
Similarly, on corporation tax
returns, some 2.8 million should have been submitted, but 1.2 million were not.
According to Mr Murphy, only a few hundred are ever checked by the Inland Revenue – and given the average corporation tax return is £10,000 – he estimates that literally billions of pounds of tax is never collected.
He said: “Enormous numbers of companies are disappearing without trace in the UK without the Registrar of Companies knowing a thing about them. And the cost of that falls on all of us who allow this situation to persist. It’s a cost from fraudulent trading, lost tax, potential criminal abuse of UK companies and even the possibility that UK companies are used for money laundering or terrorist financing with little or no chance of detection.”
Mark Serwotka, general secretary of the PCS, said: “The Government should investigate these issues as a matter of urgency. Instead of cutting jobs at Companies House and in HM Revenue and Customs, ministers should be putting the proper resources in place to tackle what is clearly a massive problem which, if addressed, would change the debate about public spending overnight.
