Tax investigations into the UK’s largest companies are lasting almost three and a half years on average, highlighting the growing scrutiny facing major businesses and the administrative burden that can accompany it.

Research by Pinsent Masons found that open investigations conducted by HM Revenue & Customs into large businesses remained active for an average of 41 months.

Jake Landman, partner and head of tax disputes at Pinsent Masons, said the number of active cases handled by HMRC’s Large Business Directorate had increased from 2,031 to 2,149 over the past year. The unit oversees the tax affairs of the UK’s largest companies, typically those with annual revenues exceeding £200m.

Large businesses account for around 40 per cent of all tax collected by HMRC, making compliance in the sector a key focus for the authority.

Landman said the rise in investigations reflected HMRC’s efforts to close the UK’s estimated £47bn tax gap as well as the lengthy time required to complete complex enquiries. During the year, the directorate opened 1,879 new cases — an increase of more than 21 per cent compared with the previous year.

However, the extended duration of investigations can create uncertainty for companies already navigating challenging economic conditions. “Having tax affairs under investigation for three, four or even five years adds a significant administrative burden,” Landman said. “At a time when business confidence is already fragile, it risks undermining efforts to present the UK as a business-friendly environment.”

HMRC’s Large Business Directorate focuses on roughly 2,000 of the country’s biggest companies. Given the number of open cases, Landman said it was likely that many of those businesses were facing more than one investigation at the same time.

The tax authority has been working to reduce the backlog of cases. According to the study, HMRC closed 1,761 investigations last year, up from 1,617 the previous year. The average duration of investigations has also fallen slightly, from 45 months to 41 months.

Even so, some cases remain open for more than four years, suggesting further resources may be needed if HMRC is to accelerate the pace of resolution.

Scrutiny of the tax authority’s approach is also increasing. The Public Accounts Committee is currently conducting an inquiry into tax compliance among large businesses, examining how HMRC enforces rules and ensures multinational companies meet their tax obligations.