Research and analysis

Executive Summary: Large Business Survey 2022

Published 17 July 2023

1. Introduction

HMRC has a strategic priority to support more customers to resolve issues quickly and easily, deliver new systems and improved online services and keep the tax gap from widening. HMRC first commissioned the Large Business Survey (LBS) in 2015 to help evaluate whether HMRC’s processes are delivering the intended customer experience and examine views about specific policies from a large business perspective. This report summarises the eighth wave of the LBS (LBS 2022 or W8) with the largest and most complex businesses in the UK^{[footnote 1]}.

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

• a quantitative telephone survey with 548 Heads of Tax or Finance Directors from HMRC’s large business customers (representing 31% of the population) that was conducted between 31 August 2022 and 6th January 2023.

• a qualitative ‘follow-up’ phase, consisting of 30 in-depth interviews conducted via telephone or Microsoft Teams with respondents from the main survey, was conducted between 23rd January and 27th February 2023.

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

2. Overall customer experience

The majority (81%) of businesses rated their overall experience of dealing with HMRC as ‘good’ in 2022, which is broadly in line with 2021 (83%). This suggests that the overall experience score has reverted to the ‘norm’ having peaked in 2020 at 91% due to the support HMRC provided to businesses during the COVID-19 pandemic.

Most businesses that participated in the qualitative follow-up were positive about their relationship with HMRC at an overall level. They generally reported having a positive working relationship with HMRC overall, describing it as ‘open’, ‘collaborative’, and ‘co-operative’. Some also spontaneously mentioned that their relationship with HMRC is better than their working relationship with other tax authorities.

However, some felt their working relationship would be improved if they had more contact with or timely engagement from HMRC. This included numerous businesses that reported that they have found it increasingly difficult to get in contact with the appropriate people at HMRC, which they perceived to be down to resource constraints and HMRC staff becoming increasingly overstretched.

3. What makes a good experience for large business customers?

Key Driver Analysis (KDA^{[footnote 2]}) identified the top 5 areas of service which had the most impact on customers’ overall experience of dealing with HMRC in 2022 (see Figure 1.1). The top five key drivers of overall experience in 2022 shown in Figure 1.1 were: ‘HMRC are easy to deal with’ (69%), ‘interaction led to the business having confidence in HMRC’ (66%), ‘there is good co-ordination across HMRC’ (58%), ‘HMRC are competent in their treatment of the business’ (81%) and ‘HMRC actively seeking a co-operative relationship with you’ (87%).

Figure 1.1: The 5 most important ‘key drivers’ of overall experience in 2022, and the proportion of customers giving a positive response to each

Key drivers	Total agree
HMRC are easy to deal with	69%
Interaction led to the business having confidence in HMRC	66%*
There is good co-ordination across HMRC	58%
HMRC are competent in their treatment of business	81%
HMRC actively seek a co-operative relationship with you	87%

Base: All businesses (2022: 548) *All businesses that contacted HMRC on tax issues not including routine filing (2022: 487)

The performance measures identified as the most important key drivers of customers’ overall experience of dealing with HMRC in 2022 were largely consistent this those identified 2021, with four of the five remaining the same. The only difference was that ‘There is good co-ordination across HMRC’ did not feature as a key driver in 2021. This performance measure replaced ‘HMRC made clear the steps you needed to take’.

Businesses were generally more positive about each of the key drivers of overall experience when they reported that they had a ‘good’ relationship with their CCM. Having a single dedicated contact was widely reported to make it easier to deal with HMRC because it meant the business knows who to get in touch with if they have queries or issues. Businesses also reported that CCMs play a pivotal role in taking ownership of issues to help ensure that HMRC’s response is more co-ordinated. Feedback collected during the qualitative interviews also showed that businesses perceptions on whether they felt HMRC actively seeks a co-operative relationship with them or not hinges on perceptions of CCM performance.

4. Wider customer experience

Across the wider measures of customer experience, businesses were most likely to be positive about the extent to which HMRC is perceived to treat their business fairly (89% agreed with this performance measure in 2022). They were least likely to agree that HMRC provided their business with certainty in its tax affairs (64% agreed in 2022).

As in 2021, feedback collected in the qualitative interviews showed that businesses felt HMRC being able to provide certainty often hinged on them having an open and transparent relationship with HMRC. They felt that HMRC were more likely to be able to provide their business with certainty if they were willing to establish a collaborative dialogue with businesses to discuss potential issues. Most businesses that did not agree that HMRC provided their business with certainty said that poor response times and a perceived lack of transparency in terms of HMRC’s decision-making exacerbated uncertainty.

5. Relationship with the Customer Compliance Manager (CCM)

Most large businesses (95%) had dealt personally with the CCM responsible for their business in the 12 months before they participated in the LBS 2022. This was in line with the previous waves of the LBS (2021: 93%%; 2020: 95%; 2019: 93%).

Businesses that had contact with their CCM in 2022 were asked to rate their overall relationship with the CCM. Almost all (95%) described their overall relationship with their CCM as ‘good, including 64% that rated it ‘very good’. Only a small minority (4%) rated it as ‘neither good nor poor’ and just 1% regarded their relationship as ‘poor’. These results are consistent with 2021.

As in 2021, businesses that participated in qualitative interviews often highlighted their relationship with their CCM as the thing they valued most about their working relationship with HMRC.  Many felt that the involvement of their CCM made dealings with HMRC more efficient, straightforward, and co-ordinated, and that their involvement was more likely to mean that their issue was resolved in a timely manner.

However, some businesses raised concerns about how the role of CCMs has changed in recent years. They felt that CCMs are unable or reluctant to make meaningful decisions without deferring to specialist teams. They felt that working with specialists is not as efficient since they can be more difficult to establish contact with, and because they do not have the same level of understanding about the business.

Others reported a decline in interaction with their CCM and had found it more difficult to get their CCM to engage with queries and issues raised. Some businesses perceived that this was sometimes down to resource constraints at HMRC resulting in staff turnover and increased workloads for some CCMs.

6. Contact with HMRC

Nine in ten businesses had contacted HMRC in relation to tax issues excluding the routine filing of returns in the 12 months preceding their participation in the LBS 2022 (89%), up significantly from 84% in 2021. This equates to 487 businesses in 2022 and 496 businesses in 2021.

Half (51%) of the businesses that had contacted HMRC agreed that ‘HMRC responded in a timeframe that was reasonable from a commercial perspective’, while 31% disagreed and 18% neither agreed nor disagreed. The proportion of businesses that agreed with this measure decreased significantly between 2021 and 2022 (from to 57% to 51%).

Businesses that took part in qualitative follow-ups said that HMRC response times were especially slow when using communication channels other than their CCM, such as mailboxes, telephone helplines and written correspondence.

Most of the 487 businesses that contacted HMRC in 2022 agreed that:

• their contact led to the business ‘having a more transparent relationship with HMRC’ (91%)

• their contact led to their business having trust in HMRC (71%)

• their contact led to the business having confidence in HMRC (66%)

Again, these results were consistent with previous waves.

7. HMRC enquiries

Around two fifths (38%) of businesses have had a formal enquiry about their business’ tax affairs in the 12 months leading up to their involvement in the LBS 2022. Of these businesses, two thirds (66%) reported that was ongoing at the time they participated in the survey and a third (33%) reported that enquiry was resolved.

Amongst the businesses that had a formal enquiry, around four fifths (78%) agreed that HMRC treated them in a ‘reasonable manner’ during the process, around two thirds (62%) found it easy to understand what was happening during the process and almost half (47%) agreed that the experience had an impact on how the business would act in relation to a similar issue in the future.

8. Administrative burden

Just under half (46%) of all businesses agreed that the overall level of administrative burden relating to tax compliance was ‘reasonable’ in 2022. A quarter (26%) neither agreed nor disagreed and around three in ten (28%) disagreed. These results were consistent with 2021.

9. Changes to systems and processes

Just over two fifths (44%) of businesses reported making substantial improvements to their tax systems and processes outside of those required by HMRC in the 12 months prior to their involvement in the LBS 2022.

Feedback from the qualitative interviews showed that the nature of improvements to their tax systems and processes beyond those required by HMRC varied considerably. Specific examples cited included introducing software to improve information flows, the automation of processes and the implementation of an entirely new Enterprise Resource Planning (ERP) system.

Businesses generally reported that it can be costly and time-consuming for businesses to make changes to their tax systems and processes. The cost and resource required is amplified for more complex changes and for businesses that have more complex systems and processes. As such, many reported that non-statutory improvements are rarely a priority for the wider business.

10. Co-operative assurance reviews

Two fifths (40%) of businesses indicated that they would be open to HMRC conducting a co-operative assurance review, while 52% were not open to engaging in such an exercise and 8% were unsure.

During qualitative interviews, businesses that had agreed that they would be open to HMRC conducting a co-operative assurance review said they would need more information before volunteering for such an exercise. Specifically, these businesses would want to know what HMRC are looking to achieve, who would be involved in the review, what would be expected of the business and what benefits, if any, the review would provide.

11. Appetite for working collaboratively with HMRC and tax technology providers

Two thirds (65%) of businesses ‘agreed’ that they would be open to working collaboratively in this manner, including a quarter (24%) that strongly agreed. A further quarter neither agreed nor disagreed and 11% disagreed.

The views expressed on this topic by businesses that participated in qualitative interviews were very similar to those raised when they were asked about co-operative assurance reviews. Again, many clarified their survey response by saying they would ‘in theory’ be open to working with HMRC and tax technology providers, but that they had some reservations about what this might entail. Businesses that said they would be open to working collaboratively with HMRC and tax technology providers generally felt they would need more information about the aim, their involvement, and potential benefits of this form of collaboration before opting in.

12. Business Risk Reviews (BRR+) and the Annual Conversation

The proportions of businesses that underwent a BRR+ or had an Annual Conversation increased significantly between 2021 and 2022, rising from 30% to 38% in relation to a BRR+ and from 19% to 37% for Annual Conversations. Concurrently, the proportion of businesses that reported having neither a BRR+ nor an Annual Conversation decreased significantly (from 51% in 2021 to 25% in 2022).

Most businesses that underwent a BRR+ were positive about their experience: 86% agreed that HMRC worked collaboratively with them, 79% agreed that they were clear on how to improve their risk rating and a further 79% agreed that they were clear on how HMRC came to the decision on their risk rating. These results are broadly in line with 2021.

As in 2021, most businesses that had an Annual Conversation in the 12 months prior to them participating in the LBS 2022 were positive about the experience, with 94% agreeing that it had a positive impact on their relationship with HMRC and 93% agreeing that it was a useful alternative to a BRR+.

13. Appetite for risk

As was the case in 2021, most businesses (86%) rated their appetite for boundary pushing tax planning as ‘low’. This included 61% that rated their appetite as ‘very low’. One in eight (12%) rated their appetite for risk ‘neither high nor low’, 1% rated it ‘high’ and 1% refused to answer.

14. The notification of Uncertain Tax Treatment (UTT)

Four fifths (80%) of businesses agreed that they are confident that they understand the conditions in which they should notify HMRC about a UTT, including 38% that strongly agreed. However, just over a third (36%) 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. The same proportion (36%) neither agreed or disagreed with the statement, and around a fifth (22%) disagreed.

Amongst the businesses that did not agree that the UTT requirement had made them more likely to actively engage with HMRC attributed this to the view that they already adequately engaged with the department to get certainty (54%), followed by the view that the business was unlikely to have uncertain tax treatments as per the requirement (27%).

1. The LBS was first commissioned in 2015 and it was re-contracted in 2018 and 2021. Prior to the LBS, HMRC commissioned the Large Business Panel Survey (LBPS) between 2010 and 2014 which asked some of the same questions, and HMRC have been conducting research with this audience since 2008. ↩

2. A statistical technique used to determine which elements of HMRC’s service were most likely to contribute to a ‘good’ rating of overall experience. This analysis therefore identifies the areas which have the most impact on customers’ overall experience of dealing with HMRC. ↩