Tax Control Framework

HMRC has just announced the number of investigations and opportunities it has under review in relation to Corporate Criminal Offence. Find out what else is in their statement and what you can do for your business to help manage tax compliance risk, in this short summary.

Following the recent relaunch of HMRC’s Business Risk Review Process, (BRR+) there is now a clearer definition of the low risk indicators that HMRC will apply when how it risk rates taxpayers. As a result, careful consideration needs to be given to the governance, risk and control model used to demonstrate compliance with the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA).

HMRC are updating their Business Risk Review (BRR) process later this year, primarily to leverage its ability to influence taxpayer behaviour to adopt a lower risk approach to managing their UK tax affairs, as well as looking to more accurately reflect the risk profile of taxpayers. This will allow them to better target its resources to those taxpayers who represent greater risk. Having carried out a pilot with 65 taxpayers, at the end of last year, HMRC have confirmed they are planning for the new process to be introduced from October 2019.

The legal, financial and reputational consequences for Organisations not having reasonable procedures to prevent the facilitation of tax are such that the Corporate Criminal Offences for failing to prevent the facilitation of tax evasion (“CCO”) legislation has become an established part of the financial crime prevention suite. An Organisation’s only defence is to be able to demonstrate proportionate and reasonable procedures in accordance with HMRC’s six key guiding principles. Examples of what this looks like in practice include: - Conducting and documenting a CCO risk assessment; - Communication from senior management raising awareness with staff and other associated persons; - Training for staff in higher risk positions; - Remediation of identified control gaps (including updates to policies and procedures); and - Establishing an assurance programme to monitor the effectiveness of key controls. These actions will help mitigate the risk of facilitation of tax evasion risks and enable Organisations to rely on the statutory defence of 'reasonable prevention procedures' if required.

On 29 March 2019, the OECD Forum on Tax Administration announced the expansion of the current International Compliance and Assurance Programme (ICAP) pilot to a second pilot (ICAP 2.0). The ICAP programme is a voluntary risk assessment and assurance programme, entered into by MNEs and a growing number tax administrations, to provide tax certainty with respect to certain transactions and activities undertaken by the MNE. Coming at a time when HMRC is updating its own approach to Business Risk Review in the UK, this is an important area of development for MNEs to be aware of to ensure compliance.

An article discussing self-reporting of corporate criminal offences under the Criminal Finances Act 2017.

Following a recent advisor meeting with HMRC to receive an update on the application of the Senior Accounting Officer (SAO) and Tax Strategy rules, we have an update to share.

In September 2018, HMRC rolled out a pilot of an updated and altogether more in-depth BRR. This involves a greater level of detailed data being requested from companies across the taxes. It also sets out how HMRC will apply a separate risk rating for each tax regime based on three separate behavioural factors and how they will assess business on four levels of risk.

Feedback from the pilot and insights into what to expect next from HMRC were shared in the joint PwC and HMRC webcast on 19 March 2019.

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We recently held a Business Risk Review (BRR) Seminar with HMRC. Adam Cartwright, a Corporate Compliance Manager (CCM) at HMRC co-presented with us to provide an update on HMRC's Business Risk Review Process and also provided additional insight on a current campaign being led by HMRC in relation to employee expense reviews. In this article we highlight the key messages from the seminar and action companies need to consider.

From 30 September 2017 a new corporate criminal offence for failure to prevent facilitation of tax evasion came into force.

December 2017 saw many companies publish their tax strategy, as regulations came into force requiring large companies to produce a public tax strategy for accounting periods starting after 15 September 2016. The majority of the FTSE100 have now published their tax strategy. With continuing public and media interest in companies’ tax affairs, many companies will want to understand how their tax strategy compares to others.

With the GDPR now in force, explore the findings from our Readiness Assessments, compiled over two years and across 15 different industry sectors, and consider how well prepared is your business?

With the 25 May General Data Protection Regulation (GDPR) implementation date fast approaching we will be looking back on the journey we have been on since Thursday April 14, 2016 when the GDPR was finally approved by the EU Parliament. We will be sharing insights around the challenges of the data transformation journey that many are facing and how they should be planning to move forward in the GDPR ‘live environment’.

GDPR will apply to employers from 25 May 2018, updating existing regulation for the digital age. It will have a significant impact on the way employers collect, process, retain and share personal data relating to employees.

On 19 March, HMRC published their response to the business risk review (BRR) consultation.