Search for

Ensuring there’s a low risk of provoking HMRC enquiries

1 Dec 08

Businesses across the UK are striving to be awarded “low risk” status to avoid continual enquiries and interventions from HM Revenue & Customs

Businesses across the UK are striving to be awarded “low risk” status to avoid continual enquiries and interventions from HM Revenue & Customs.

HMRC’s Review of Links with Large Business (RLLB) approach is leading to increased scrutiny of businesses that are suspected to be at risk of not paying the right tax at the right time.

HMRC’s new approach has been implemented for groups whose tax affairs are handled by the Large Business Service.

This approach involves the appointment by HMRC of a customer relationship manager (CRM) to each Large Business Service group. The CRM pulls together an overview of all aspects of the group’s taxation affairs, including corporation tax, VAT and PAYE, to inform HMRC's Risk Review of the group.

Above all, the CRM will want to be assured that the figures in the group’s tax returns can be relied on.

Following a risk review with the CRM, the group is assigned either a low or high risk status.

The advantage of being assigned a low risk rating is that these groups can reasonably expect that HMRC will not open enquiries into their tax affairs for the next three years. On the other hand, a high risk group can expect frequent and robust “interventions” by HMRC, whose objective will be to make sure that the group is paying the right amount of tax.

Businesses can really benefit from HMRC’s new approach. By engaging with the authorities early on, companies can be assured of dialogue and will be able to work on real-time issues, rather than always having to respond to enquiries by HMRC into historical matters. By adopting a transparent and open attitude, companies are also more likely to be given a low risk status and avoid further interventions and queries.

The RLLB approach is being rolled out to groups whose

tax affairs are handled by the large and complex units of local HMRC offices.

 

In the first instance, CRMs will be appointed to groups or entities with a turnover of at least £200m, with the aim that all such groups should have been subject to a Risk Review by 31 March 2009.

Thereafter the process will be extended to large and complex groups with turnover below £200m.

Have your say





Page No: 98

Tags

Related Articles

Advertisement