HMRC have published a consultation ‘Large Business compliance – enhancing our risk assessment approach’.

The consultation, looks at how HMRC might refresh and improve the current risk assessment approach. The Customer Relationship Manager (CRM) currently undertakes a Business Risk Review (BRR) periodically to determine how much scrutiny and support a large business will receive from HMRC.

Whilst HMRC take the view that the current ‘low risk’/’non-low risk’ approach still works after 10 years, they are looking to introduce additional risk categories and continue to shift large business compliance behaviour, whilst also providing greater clarity for large businesses.

The consultation closes on 6 December 2017.


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Compliance review: returns, filing & payments

The consultation document can be found here.

Summary of consultation questions

  1. Do you think the current process provides HMRC with a comprehensive view of tax risk within a business? If not, what more should HMRC be doing, and how could this be improved?
  2. Do you think the current Low Risk/Non Low risk distinction is optimal for HMRC and/ or business purposes? Would having a wider range of risk distinctions provide more clarity?
  3. Do you agree the level of risk within a business should influence the frequency of HMRC conducting a BRR? If not please explain.
  4. Are there any areas which you think are missing from the inherent risk factors within the current BRR framework?
  5. Are there any areas which you think are missing from the behavioural risk factors within the current BRR framework?
  6. Do you think any of the areas identified should attract a greater or lesser degree of weighting due to their significant impact on overall risk? If so, please expand.
  7. Is the current approach to the use of tax planning in the BRR assessment appropriate?
  8. Is there other evidence of the practical applications of tax risk governance that HMRC should take into account when assessing risk within businesses?
  9. Do you think HMRC should be more explicit around the risks in Corporation Tax (CT), Value Added Tax (VAT), Employer Duties (PAYE/National Insurance Contributions), and/or international tax risks? If yes, please specify and explain
  10. Do you think there would be benefits in running a BRR that focusses on specific risk regimes or areas, [for example dropping areas where there is negligible activity or risk] with suitable businesses?
  11. If HMRC introduced a greater segmentation, what opportunities do you foresee for HMRC and business?
  12. What advantages should HMRC attach to these categories so as to reduce burden on lower risk businesses?
  13. HMRC is encouraging businesses to adopt lower risk behaviours. Can you identify anything else that would further encourage lower risk businesses to maintain or adopt lower risk behaviours?
  14. For those businesses at the higher end of the risk spectrum, what are the opportunities to encourage lower risk behaviours? This could include adopting a Code of Practice on for the highest-risk customers, similar to the Code of Practice on Taxation for Banks (a link to the code can be found here)
  15. Do you agree that for a business to be classified by HMRC as low risk it should be expected fulfil the requirements set out for a TCF?
  16. Does HMRC’s existing BRR process already encapsulate the content of a TCF (and more)? If you consider there are any missing areas, please explain.
  17. 17. Are there any others areas of the BRR that HMRC should consider as part of the review of the BRR?


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