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Detail of outcome
In this consultation, the government invited views on how to improve HMRC’s risk assessment of large businesses and, in particular, the Business Risk Review (BRR).
Most respondents thought that the existing BRR works well, but there were several suggestions about how HMRC could improve the process. These included increasing the number of risk categories, taking more account of the tax risk management work already required by large businesses, more clarity on the advantages and disadvantages of classification into particular risk categories, and continuous dialogue between HMRC’s Customer Compliance Managers and their customers on reducing tax risks.
HMRC will develop a new version of the BRR that will reflect some of the proposals mentioned above, with the intention of piloting later this year across a defined group of customers. The pilot will run alongside existing BRRs, minimising disruption. As long as the pilot delivers the desired outcomes, the improved BRR will be rolled out in 2019 to 2020.
The document, ‘Large Business compliance – enhancing our risk assessment approach (summary of responses)’:
- sets out the background to the consultation
- outlines the responses to the consultation
- sets out the government’s response
The Business Risk Review (BRR) is a core feature of how HMRC manages the tax compliance of the largest businesses. Customer Relationship Managers currently conduct a periodic BRR of each large business, assessing their risk profile and placing them into a binary ‘low risk’/‘non-low risk’ category. This assessment is a key determinant of the level of scrutiny and resource the business receives from HMRC. The process, while still effective, has undergone limited change since its introduction 10 years ago.
We are seeking your views on how a refreshed BRR approach, potentially with more (e.g. 4-5) risk categories tailored to the tax risks encountered in the large business population, will:
- support HMRC in maintaining a shift in large business compliance behaviours
- provide greater clarity and confidence for large businesses - for example, the BRR could place businesses into a low risk, low-moderate risk, high-moderate risk, high risk and significant risk category