Guidance

General information about compliance checks into large and complex businesses

Updated 11 March 2022

This factsheet tells you about compliance checks into large and complex businesses. It’s one of a series of compliance checks factsheets. For the full list, go to www.gov.uk and search for ‘HMRC compliance checks factsheets’.

How we work with large and complex businesses

The tax affairs of the largest and most complex businesses are looked after by the Large Business part of HMRC. Each is allocated a Customer Compliance Manager (CCM) because of their size or the complexity of their tax affairs. The CCM manages HMRC’s compliance activities and the relationship between the business and HMRC across all taxes and duties. Our CCMs work with these large business customers to identify, check and manage tax risk.

Our goal is to build an open and trusting relationship with these businesses. To do this, we’ll:

• be open and transparent in our dealings with you
• expect you to co-operate openly and transparently with us
• work with you to explore tax risks that we, or you, identify
• discuss those risks with you in the first instance, before considering the use of formal powers

We may however need to use our formal powers or issue an assessment notice under certain circumstances. For example:

• if you prefer a formal approach
• where a time limit for making an assessment is approaching
• if we’ve been unable to resolve an issue and need to formally request information from you
• if the issue is likely to be taken before an independent appeal tribunal for a decision

What are compliance checks

We carry out checks into returns or other documents to make sure that our customers pay the right amount of tax at the right time and receive the right allowances and tax reliefs. We call these checks ‘compliance checks’.

If we start a check, we’ll tell you what we’re checking. We’ll ask you to give us any information or documents that we may need. If you are not sure why we’re asking for something, please tell us and we’ll explain why we need it.

Please tell us if you cannot do what we ask, or if you think that something we’ve asked for is unreasonable or not relevant to the check. We’ll consider your reasons carefully and if we still think that we need it, we’ll tell you why.

The benefits of helping us with a check

If you help us with the compliance check, we can:

• complete it quickly and reduce any inconvenience to you
• reduce the amount of any penalty we charge you if we find there’s something wrong

If we find something wrong, we’ll work with you to put it right, and tell you if you need to pay any:

• additional tax and late payment interest
• penalties

If we’re considering charging you a penalty, we’ll look at how much assistance you’ve given us during the check. We call this assistance the ‘quality of disclosure’, or ‘telling, helping and giving’.

We measure the quality of disclosure by considering how much:

• you tell us about what’s wrong
• help you give us to work out what’s wrong
• access you give us to the information or documents we need to complete the check

If there are ways that you can help us with the check, but you choose not to, this will affect our view on the quality of disclosure. For example, if we ask:

• to visit your business premises to inspect your business records, assets or premises, or to carry out a valuation but you do not let us
• for information or documents, but you do not give us everything we’ve asked for

Use of open source material during a compliance check

We may observe, monitor, record and retain internet data which is available to anyone. This is known as ‘open source’ material and includes news reports, internet sites, Companies House and Land Registry records, blogs and social networking sites where no privacy settings have been applied.

How to get the maximum penalty reduction if something is wrong

If there’s something wrong and you do everything you can to assist us, we’ll reduce the penalty by the maximum amount possible.

If you know or suspect that there’s something wrong, you must:

• tell us everything you know about it immediately
• work with us to calculate the right amount of tax

If we find something wrong that you did not know about, to get the maximum reduction possible, you must:

• have given us as much assistance as we needed, up to the point we found something wrong
• immediately tell the officer dealing with the check everything about it, let them see any records they ask for, and help them to work out the right amount of tax

To work out the quality of disclosure, we also consider how long it’s taken you to tell us about anything that’s wrong. If it’s taken you a long time, for example 3 years or more, we usually restrict the maximum reduction we give for the quality of disclosure to 10 percentage points above the minimum of the penalty range. This means you will not benefit from the lowest penalty percentage that’s normally available.

For more information about penalties, go to www.gov.uk and search for ‘HMRC compliance checks factsheets’ then select ‘Penalties’.

If you’ve deliberately done something wrong

We may carry out a criminal investigation with a view to prosecution if you’ve deliberately done something wrong, for example:

• given us information that you know is not true, either verbally or in a document
• dishonestly misrepresented how much tax you owe, or claimed payments you’re not entitled to

Managing serious defaulters

If you deliberately got your tax affairs wrong, and we find this during the check, we may monitor your tax affairs more closely. We have an enhanced monitoring programme called ‘managing serious defaulters’. For more information, read factsheet CC/FS14, ‘Managing serious defaulters’. Go to www.gov.uk and search for ‘CC/FS14’.

Publishing details of deliberate defaulters

We may publish your details if you deliberately got your tax affairs wrong, but we will not do this if we’ve given you the maximum penalty reduction. For more information, read factsheet CC/FS13, ‘Publishing details of deliberate defaulters’. Go to www.gov.uk and search for ‘CC/FS13’.

If you disagree

If there’s something that you do not agree with, please tell us. In most Large Business cases you should expect the CCM to work with you to resolve disputes.

If we make a decision that you can appeal against, we’ll write to you about the decision and tell you what to do if you disagree. You’ll usually have 3 options. Within 30 days you can:

• send new information to your CCM and ask them to take it into account
• have your case reviewed by an HMRC officer who has not been involved in the matter
• arrange for an independent tribunal to hear your appeal and decide the matter

Whichever you choose, you may also be able to ask for an HMRC specialist officer to act as a neutral facilitator to help resolve the dispute. We call this ‘Alternative Dispute Resolution’ (ADR).

ADR is only available for disputes that relate to specific tax areas. The officer dealing with the check will tell you if ADR is available for your dispute. For more information about appeals and ADR, read factsheets:

• HMRC1, ‘HM Revenue and Customs decisions — what to do if you disagree’
• CC/FS21, ‘Alternative Dispute Resolution’

Go to www.gov.uk and search for ‘HMRC1’ or ‘CC/FS21’.

Your principal rights and obligations

You have:

• the right to be represented — you can appoint anyone to act on your behalf
• an obligation to take reasonable care to get things right — if you have an adviser, you must still take reasonable care to make sure that any returns, documents or details they send us on your behalf are correct

The ‘HMRC Charter’ explains what you can expect from us and what we expect from you. For more information, go to www.gov.uk and search for ‘HMRC Charter’.

Your rights if we’re considering penalties

We’ll tell you if there’s something wrong and we’re considering penalties. To find out what rights you have when we consider penalties, read factsheet CC/FS9, ‘The Human Rights Act and penalties’. Go to www.gov.uk and search for ‘CC/FS9’.

Compliance checks that this factsheet relates to

This factsheet relates to compliance checks into any of the following:

• Aggregates Levy
• Air Passenger Duty
• Alcoholic Liquor Duties
• Amusement Machine Licence Duty
• Annual Tax on Enveloped Dwellings
• Apprenticeship Levy (For Apprenticeship Levy, this factsheet relates to returns for tax years starting on or after 6 April 2017)
• Bank Payroll Tax
• Bingo Duty
• Capital Gains Tax
• Climate Change Levy
• Construction Industry Scheme
• Corporation Tax
• Digital Services Tax (For Digital Services Tax, this factsheet relates to returns for periods beginning on or after 1 April 2020)
• Diverted Profits Tax
• Excise Duties (Holding and Movements)
• Gaming Duty
• General Betting Duty
• Hydrocarbon Oils Duty
• Income Tax
• Inheritance Tax
• Insurance Premium Tax
• Landfill Tax
• Lottery Duty
• Machine Games Duty
• National Insurance Classes 1,1a and 4 (For Class 1A National Insurance this factsheet only relates to P11D(b) returns for tax years starting on or after 6 April 2010)
• Pay As You Earn (PAYE)
• Petroleum Revenue Tax
• Pool Betting Duty
• Remote Gaming Duty
• Soft Drinks Industry Levy
• Stamp Duty Land Tax
• Stamp Duty Reserve Tax
• Tobacco Products Duty
• VAT

More information

Our privacy notice

Our privacy notice sets out the standards that you can expect from us when we ask for information or hold information about you. Go to www.gov.uk and search for ‘HMRC Privacy Notice’.

If you are not happy with our service

Please tell your CCM or the office you’ve been dealing with. They’ll try to put things right. If you are still not happy, they’ll tell you how to make a formal complaint.