The company's legal action against the Revenue questions the tax authority's right to go back before 1986 to contest the group's transfer pricing policy and hence its tax payments over a near 20-year period.
A judgment last month said the Revenue does have that right.
Tax experts say that if the company fails in the courts, it could find itself with a tax liability of hundreds of millions of pounds.
The company's annual accounts have consistently stated that adequate provision has been made for tax liabilities.
In a briefing document the company says the Inland Revenue has been in dispute with the company over a long period of time but, "despite the length of time that has elapsed, it has not yet assessed the group nor has it quantified its claims in any way".
"Furthermore," Glaxo says, "the Inland Revenue contends that it can continue its review without any time limit. Glaxo Wellcome contends that the law does not allow the Inland Revenue to leave taxpayers in such uncertainty, and has asked the courts to declare years up to 1986 closed to further review."
There are concerns in the City that Glaxo faces a far greater tax liability than previously thought as a result of its disputed transfer pricing policy.
Glaxo is reticent on two counts. It declines to say how much money is at stake and how far back the Revenue's claims to tax and interest go.
In US filings the company has indicated it has a potential liability of pounds 463m in the years from 1987 onwards, but this takes no account of possible tax owed by the company, and interest on that tax, prior to 1986.
Transfer pricing is the method by which subsidiaries of multinationals account for sales between different subsidiaries.
It can involve a company legitimately managing its pricing policy between subsidiaries to maximise the profits shown in low-tax regimes, such as Singapore, and minimise the profits shown in high-tax regimes.
The tax benefit in this case is likely to relate chiefly to Zantac, the anti-ulcer drug which was behind Glaxo's phenomenal growth in the 1980s. Sales of Zantac, which is manufactured in Singapore, started in 1981. It later became the world's largest-selling drug.
Meanwhile, the Inland Revenue appears determined to tighten up on corporate tax loopholes. In a new management plan to 1997-98 the Inland Revenue lists one of its key objectives as ensuring "that UK legislation on international tax matters is effectively complied with".
The Independent has recently shown how Rupert Murdoch's News International made nearly pounds 1bn in profits but paid just pounds 11.7m in tax, while complying with UK tax law.Reuse content