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HMRC internal manual

Labour Provider Guidance

Yield and Measures: Future Revenue Benefit

Behavioural Changes as a result of LM interventions can be scored either as Future Revenue Benefit (FRB) or Revenue Loss Prevented (RLP) LPOG10400

Main scenarios where Future Revenue Benefit (FRB) can be claimed:

  • A non-compliant LP becomes compliant.
  • A non-compliant LP is removed and the workforce taken on by user.
  • A non-compliant LP is removed and the replacement LP is compliant

Direct tax - previously Intervention Yield

This relates to all direct taxes and is a measurement of the actual increase in tax paid. The actual amount can be scored for a maximum of two years (evidence must be held to support any claim). Compute the actual change over the four months immediately following the intervention, then multiply by up to six as appropriate.

Indirect tax - previously Displacement Yield

Where as a result of a LM intervention supplies made by a non-compliant labour provider begin to be made by a compliant business, and the overall VAT yield has increased, FRB can be scored for a maximum of two years (evidence must be held to support any claim). Compute the actual change over the three months immediately following the intervention, then multiply by up to eight as appropriate. For cases of Missing returns received and paid the calculation is based on the additional yield obtained on the missing returns i.e. the difference between the central assessment(s) and the return(s) received.

If you are unable to forecast an FRB value in an Indirect Tax case as you have no historical information to aid the calculation, caseworkers should revert to the fallback position of calculating FRB as £44,500 per quarter, subject to the de minimis limit of £2,000 per month.

Examples of range of yield claims for LM Interventions LPOG10500.

Recording FRB Yield

Any Future Revenue Benefit (FRB) that is scored is reported both internally and externally as part of HMRC’s revenue protection measure. It is open to audit by HM Treasury and therefore it is a condition of any claim for FRB that there must be a strong audit trail to evidence why FRB was claimed and how it was calculated.

The main guidance on FRB is found at COG18200 

Completion of form FRB1 is mandatory and must be used in all cases in FIS where FRB could be scored to give an audit trail demonstrating the reason underlying the FRB claim, the behavioural change brought about by FIS compliance action and the calculations used showing how FRB has been worked out.

The FRB Audit trail template (see FRB1 - FRB checklist in SEES forms and letters) sets out the conditions which must be satisfied for FRB to be scored. If these conditions are not satisfied, then FRB cannot be claimed. Complete the template with the details requested - see COG 18225 for further details.

Particular care should be taken to ensure that the correct baseline is used to calculate the FRB i.e. the 4 months for Direct Tax and the 3 months for Indirect Tax immediately following the intervention, other than for Missing Returns, see above. A different period must not be used where the effect of this increases the FRB claim.

Once completed the template authorised by the manager must be filed in EF and Caseflow. 

Results are recorded on Caseflow - guidance can be found under the Compliance Operational Guidance (COG) under Caseflow 2