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1. Introduction

HM Revenue and Customs (HMRC) has a strategic priority to deliver strong customer service for all. As part of this, HMRC has been conducting research since 2008 to understand large businesses’ views of the service provided. HMRC first commissioned the Large Business Survey (LBS) in 2015 to collect robust data from these businesses to understand their needs and improve approaches to supporting tax compliance.

The LBS measures the experiences of the largest and most complex businesses in dealing with HMRC, assesses the effectiveness of tax policy and tracks how the department’s relationship with large businesses changes over time.  This report presents the findings from the LBS 2024, the tenth wave of the annual survey. ^{[footnote 1]}

The report is based on data from 2 strands of research:

• a quantitative survey with 548 Heads of Tax or Finance Directors from HMRC’s large business customers (representing 31% of the large business population) conducted between 9 September 2024 and 24 January 2025, 515 surveys were conducted via telephone and 33 surveys were conducted online
• a qualitative ‘follow-up’ phase, consisting of 30 in-depth interviews conducted via telephone or online with respondents from the main survey, carried out between 28 January and 6 March 2025

Any significant differences between waves of research have been measured using t-testing and are significant at a 95% confidence interval.

2. Key findings

2.1 Overall customer experience

Most large businesses (82%) rated their overall experience of dealing with HRMC in 2024 as good, which is in line with 2023 (81%).

As part of the Large Business Survey 2024, Bayesian Network analysis was conducted to identify the factors that most strongly influenced overall customer experience of dealing with HMRC and to understand how these factors influenced one another. The analysis found that overall experience of dealing with HMRC was primarily shaped by 2 factors:

• ease of dealing with HMRC
• perceptions of HMRC’s competence in the treatment of businesses

Businesses that spoke positively about their dealings with HMRC during qualitative interviews described the relationship as ‘open’, ‘collaborative’ and ‘productive’. As with previous years, businesses that described positive relationships with Customer Compliance Managers (CCMs) were generally positive about their relationship with HRMC at an overall level.

Businesses that did not report having a good relationship with HMRC in 2024 often cited unresolved issues and a perceived lack of understanding and accommodation of their business’s specific circumstances.

Recommendations for improvement continued to reflect key themes from previous years, including reducing staff turnover at HMRC and giving CCMs greater authority to make meaningful decisions without always needing to defer to policy teams.

2.2 Wider customer experience

Businesses had predominantly positive views of HMRC’s written communication, ranging from 67% rating the ability of HMRC’s written communication to deliver certainty, to 84% HMRC’s written communication as good in terms of quality of information.

Businesses were similarly positive when it came to their relationship with HMRC, with 9 in 10 (90%) businesses agreeing that HMRC seek a co-operative relationship with them. This marks a slight, though not a statistically significant, increase compared to 86% in 2023

In this wave of LBS, businesses were asked whether HMRC could learn anything from the co-operative relationships they have with tax authorities in other jurisdictions. Those that believed HMRC could learn from other jurisdictions highlighted the benefits of more open communication and clearer, more formalised processes to reduce ambiguity in interpretation of legislation.

2.3 Relationship with Customer Compliance Managers

Most large businesses (95%) had dealt personally with the CCM responsible for their business in the 12 months before they participated in the LBS 2024. This was in line with 2023 (95%) and previous waves of this research. 

Businesses that had contact with their CCM in 2024 were asked to rate their overall relationship with them. More than 9 in 10 (91%) described their overall relationship with their CCM as good, including 59% that rated it very good. A minority (7%) rated it as neither good nor poor and a smaller minority (1%) regarded their relationship as poor. These results are consistent with 2023.

Bayesian Network analysis identified 2 factors as primary drivers of the overall CCM relationship score in 2024:

• CCM’s ability to be pragmatic
• CCM’s keeping businesses informed on progress

As in previous years, it was clear from qualitative interviews that the CCM model continues to have an important impact on how businesses view their overall experience of dealing with HMRC. Those who described their overall experience as good often said their CCM was easy to contact and characterised their relationship with their CCM as ‘productive,’ ‘transparent,’ and ‘co-operative’. However, some businesses reported that their CCM lacked the ability to make decisions, and too often deferred issues rather than resolving them.

2.4 Contact with HMRC

Nine in 10 businesses had contacted HMRC outside of routine filing of returns in the past 12 months (89%). Of these, 6 in 10 (59%) agreed that ‘HMRC responded in a timeframe that was reasonable from a commercial perspective’, which was in line with findings from 2023 (57%).

Most businesses that contacted HMRC in relation to tax issues outside of the routine filing of returns were positive about the outcomes of this contact:

• 83% agreed that their contact led to the business being transparent with HMRC
• 69% agreed that their contact led to the business having trust in HMRC
• 67% agreed that their contact led to the business having confidence in HMRC

While still representing a majority of businesses in the survey, in 2024 businesses were significantly less likely to agree their interaction with HMRC led to them having a transparent relationship when compared to 2023 (83% vs 92%).

During qualitative interviews, businesses that said contact with HMRC had led to their business being transparent often explained that transparency was a matter of principle. A few businesses indicated that their openness with HMRC was linked to a good relationship with their CCM and tax specialists. These businesses felt comfortable being transparent because they trusted HMRC personnel to be fair and professional Businesses that did not agree that contact with HMRC had led to them being transparent often cited a particular bad experience which had shaped that view. These experiences included enquiries, disputes and business risk reviews.

2.5 Compliance and risk

In LBS 2024, businesses were asked to rate their understanding of their obligations across 4 types of tax: Corporation Tax, VAT, PAYE and National Insurance, and Customs and Excise taxes.

Almost all businesses reported a good understanding of their obligations, expressed confidence in their compliance and found it easy to comply. Scores for Customs and Excise taxes were slightly lower than for the other taxes, but most business that these taxes still reported a good understanding, confidence in their compliance and ease in meeting their obligations.

Nine in 10 (91%) businesses in LBS 2024 rated their ‘appetite for risk’ in terms of boundary pushing tax planning as low. This finding is in line with 2023 (92%). Only 1% rated their appetite as high or very high, consistent with previous waves.

2.6 Legal interpretation

Just under 8 in 10 (78%) businesses felt that they understood what HMRC would consider to be a legal interpretation issue, while around 1 in 7 (15%) businesses reported being involved in a dispute with HMRC about legal interpretation at the time of participating in LBS 2024.

Around 8 in 10 of those involved in disputes agreed that ‘complex legislation’ (79%) or ‘unclear legislation’ (78%) were factors that caused disputes. Around half (51%) reported ‘unhelpful guidance’ was a factor, while almost two-fifths (38%) said ‘HMRC’s administration of the tax system’ was a factor in causing disputes.

In qualitative interviews, businesses reported relying on external advisors to help interpret legislation due to its complexity. Some also felt that tax legislation is becoming increasingly complicated over time, with new rules being introduced and specific tax issues becoming harder to interpret.

2.7 Uncertain Tax Treatment

Just under 9 in 10 (88%) businesses agreed that they are confident in their understanding of the conditions in which they should notify HMRC about an Uncertain Tax Treatment (UTT), including 50% that strongly agreed. This was significantly higher than the proportion that agreed in 2022 (80%), the last time this question was asked.

A third (32%) of businesses agreed that the UTT requirement has made them more likely to actively engage with HMRC to obtain certainty on legal interpretations of uncertain tax treatments. Just over two-fifths (42%) neither agreed or disagreed with the statement, and around a quarter (24%) disagreed.

Among the businesses that did not agree that the UTT requirement had made them more likely to actively engage with HMRC, almost four-fifths (78%) reported that this was because they did not have any new uncertain tax treatments as per the requirement, while a similar number (77%) said that they had already adequately engaged with HMRC on uncertain tax treatment.

2.8 Systems and processes

Over half (53%) of businesses reported making substantial improvements to their tax systems and processes in the 12 months prior to the survey, outside of those required by HMRC. This marks a significant increase from 2022, when 44% reported making improvements.

More than half (53%) of businesses agreed that HMRC’s ways of interacting digitally met the needs of their business, a significant increase from the last time this question was asked in 2018 (47%). Similarly, almost two-thirds (64%) agreed that increased use of digital technology by HMRC would bring efficiencies to their business, which marks a significant increase since 2021 (57%). Almost 6 in 10 (58%) agreed that their business was ready to incorporate more technology from HMRC, consistent with 2022.

Businesses that expressed readiness to adopt more digital technology from HMRC were motivated by the potential for new tools and increased automation to streamline tax compliance and reduce administrative burden. Some businesses referenced digital changes that HMRC was already planning and expressed a strong interest in their implementation. For example, e-invoicing, technology to support Pillar Two reporting and Making Tax Digital for Corporation Tax.

Around two-fifths (37%) of businesses reported they would be open to HMRC conducting a co-operative assurance review of their tax systems and processes. This was described as ’HMRC Auditors observing, either in person or via Microsoft Teams, as you demonstrate your systems in real time to identify potential weaknesses. They would not directly interact with your IT equipment’.  This was similar to findings in LBS 2022 (40%).

Businesses were also asked to what extent they would be open to working collaboratively with HMRC and their current tax technology providers to help them understand how they can potentially better utilise IT to meet their tax compliance requirements. Four-fifths (80%) of businesses agreed that they would be open to working collaboratively in this manner, including 35% that strongly agreed. Compared to 2022, the last time this question was asked, there has been a significant increase in the number of businesses open to working with HMRC and tax technology providers, rising from 65% to 80%.

Over a third (36%) of businesses said they were using e-invoicing at the time of the survey, while more than a half (54%) reported they were not and 10% were unsure. During qualitative discussions, businesses that used e-invoicing described their experience as positive. E-invoicing was said to reduce the need for manual intervention and the chance of human error. Businesses that were not using e-invoicing when they participated in the survey typically said this was because it was not yet a requirement in the UK. A few said they had considered it but felt the costs of implementation outweighed the potential benefits.

2.9 Inward investment

A quarter (25%) of businesses agreed that there were factors in HMRC’s control that limited the amount of inward investment they had made in the UK, including 1 in 10 (10%) that strongly agreed. Similarly, 1 in 10 (10%) businesses agreed that HMRC’s administration of the tax system prevented them from growing in the UK. A further 3 in 10 (30%) neither agreed nor disagreed, while three-fifths (59%) disagreed.

Qualitative interviews found that new policies were seen as complex and a feeling that HMRC were challenging tax incentives and reliefs were common factors that prevented businesses growing in the UK. Uncertainty, fuelled by a perceived lack of collaboration from HMRC and long waits for responses also contributed to businesses’ decisions not to invest in the UK.

2.10 Patent Box

A minority of businesses (7%) had elected into the Patent Box regime. Businesses with 1000 or more employees were slightly more likely to have elected in (9%), while none of the businesses with fewer than 250 employees had elected in (0%). Of businesses that had elected in, there was mixed feedback about its importance, or the impact that it had on their organisation. Most reported that the Patent Box regime had not impacted their overall business or investment decisions.

Most businesses that had not elected into the Patent Box regime reported that it was because the business’s intellectual property (IP) or innovation type did not qualify (68%). A further 16% said that the Patent Box was not relevant to the business because they have no patents and 14% felt that the administrative burden related to the Patent Box regime outweighed the potential benefits from the preferential tax rate. Some businesses in the qualitative interviews reported having investigated the Patent Box regime but found that they did not have any IP that qualified.

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