The UK tax system is incredibly complex and there is more for HMRC to do to reduce the compliance burden on large businesses. Around half of the large business tax gap results from large businesses interpreting tax law differently to HMRC. This is due, in part, to the complexity of the UK tax system. HMRC acknowledges that this complexity is a problem, as it can make it difficult for both large businesses and HMRC to be certain about when and how much tax is owed. HMRC says that some of the recent increase in complexity stems from new legislation, for example on vaping duty, and updates to the tax code to reflect developments in the wider 5 economy, such as the emergence of cryptoassets. HMRC also requests large volumes of data from large businesses and thereby imposes significant extra administrative burdens. In 2024, only 49% of large businesses surveyed by HMRC viewed the overall level of administrative burden relating to tax compliance as reasonable; 29% felt it was unreasonable. HMRC hopes that automating the collection of data will help ease the burden on large businesses. recommendation HMRC should set out what further action it will take to support large businesses in navigating a complex and burdensome tax system. 6 1 Effectiveness of HMRC’s Approach Introduction