BKM505100 - The Code commitments – relationship: introduction

All banks that adopt the Code should maintain a transparent relationship with HMRC.

The relationship commitment made by a bank which is not a small bank is set out in further detail in part 4 of the Code:

  • 4.0 Relationships with HMRC should be transparent and constructive, based on mutual trust wherever possible.
  • 4.1 The features of this relationship should include:
  1. disclosing fully the significant uncertainties in relation to tax matters
  2. focusing on significant issues
  3. seeking to resolve issues before returns are filed whenever practicable
  4. engaging in a co-operative, supportive and professional manner in all interactions
  5. working collaboratively to achieve early resolution and hence certainty.
  • 4.2 Where the bank is in doubt whether the tax result of a proposed transaction is contrary to the intentions of Parliament, it may discuss its plans in advance with HMRC.

BKM507100 provides guidance on approaching HMRC under paragraph 4.2.

BKM507650 covers HMRC’s operation of the Code and has examples setting out what a Code compliant relationship with HMRC looks like and what may give HMRC cause for concern.

The Code seeks to build and maintain a relationship between the bank and HMRC that fosters openness and a willingness to resolve areas of difference.

Below is an example of a relationship that is consistent with a bank’s Code commitments. It considers how HMRC and a bank could work together in a transparent and constructive way to correct errors and address weaknesses in the governance controlling the types of transactions they enter into, discovered during the compliance process.