In 2016 HMRC was given new powers to put companies involved in persistent and aggressive tax planning into ‘special measures’. This was defined as persistently failing to disclose information requested by HMRC, or being a serial abuser of tax avoidance schemes.

The rules were introduced in Finance Act 2016 and brought in a tough penalty system of ‘sanctions for persistently uncooperative behaviour’.

A Freedom of Information request from think tank TaxWatch has found that zero companies have been put into special measures since the legislation was introduced, despite the government claiming that this measure, together with the requirement for large firms to publish their tax strategies, would bring in more than £500m a year.

George Turner, director of TaxWatch, said: ‘The government made bold claims when it brought in this law. It's hard to believe that not a single company warranted being put on the naughty step despite the tales of persistent and aggressive tax avoidance.

‘At the time the measure was brought in the Treasury clearly thought a significant number of companies would be impacted and forecast hundreds of millions of pounds more tax being collected as a result.

‘However, we are now told that these companies had no action taken against them, having been given one last warning to improve their behaviour.

‘I doubt individuals and smaller businesses who behave in the same way would experience the same soft-touch approach from HMRC.’

Under the provisions contained in section 161 of Finance Act 2016 being placed into special measures could have serious consequences. Companies could be named and shamed, or have a strict liability for any inaccuracies in their tax returns.

In a response to the Freedom of Information request HMRC told TaxWatch that the powers had not been used because the threat of special measures was enough to change behaviours. HMRC told TaxWatch: ‘The High Risk Corporates Programme, a key part of HMRC’s code of governance for resolving tax disputes, aims to simultaneously resolve tax risks and change customer behaviour.

‘As part of this programme, special measures sanctions have been considered in a small number of cases where our large businesses demonstrate persistently uncooperative behaviours and engage in aggressive arrangements. Subsequent improvements in customers’ behaviour have removed the need to impose sanctions on these particular cases.’