Following consultation on updating its business risk review (BRR) process for large businesses, HMRC has accepted the need to expand the current risk categories from just two (low risk/non-low risk), into a range which distinguishes more clearly between low and high risk. It will pilot a revised BRR later this year across a defined group of taxpayers, incorporating new risk categories and other changes, with a view to rolling out an enhanced version more widely in 2019/20.
Key recommendations the government will adopt include:
changing the BRR’s binary ‘low risk/non-low risk’ categories to more accurately reflect the differences across the large business population;
the BRR process should take more account of tax risk management work already required by large businesses, such as the senior accounting officer (SAO) provisions and the publication of tax strategies;
the enhanced BRR should provide taxpayers and HMRC with a clear set of actions and timelines which need to be regularly updated and discussed between the two parties; and
further investigation is needed to ensure consistency in allocating a certain risk rating and, in particular, a low risk rating should only be provided to large businesses that adhere to the OECD’s ‘tax control framework’ or have similar controls in place.
Following consultation on updating its business risk review (BRR) process for large businesses, HMRC has accepted the need to expand the current risk categories from just two (low risk/non-low risk), into a range which distinguishes more clearly between low and high risk. It will pilot a revised BRR later this year across a defined group of taxpayers, incorporating new risk categories and other changes, with a view to rolling out an enhanced version more widely in 2019/20.
Key recommendations the government will adopt include:
changing the BRR’s binary ‘low risk/non-low risk’ categories to more accurately reflect the differences across the large business population;
the BRR process should take more account of tax risk management work already required by large businesses, such as the senior accounting officer (SAO) provisions and the publication of tax strategies;
the enhanced BRR should provide taxpayers and HMRC with a clear set of actions and timelines which need to be regularly updated and discussed between the two parties; and
further investigation is needed to ensure consistency in allocating a certain risk rating and, in particular, a low risk rating should only be provided to large businesses that adhere to the OECD’s ‘tax control framework’ or have similar controls in place.
