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HMRC internal manual

Specialist Investigations Operational Guidance

Introduction and organisation: introduction to governance

It is important that we can demonstrate good governance around our tax decisions. Governance applies to everyone, whether this is getting sign off from your manager at the appropriate time or having your case reviewed by the Commissioners for HMRC. Strengthened governance procedures are now in place around our largest tax disputes. It is essential that you are aware of these processes.

Tax Assurance Commissioner (TAC)

The TAC is responsible for ensuring tax disputes are resolved on a basis that determines the correct tax in terms of the law and the Litigation and Settlement Strategy (LSS) and achieves outcomes that are even-handed across different customer groups. The TAC has no role in the tax affairs of specific customers and no line management responsibility for caseworkers, maintaining clear separation of responsibilities.

When there is tax under consideration (including tax, penalties, FRB and interest, where interest is significant) of more than £100m in a case (for example, a corporate group), the decisions on how we resolve any dispute on that case are made by three Commissioners of HMRC, including the Tax Assurance Commissioner. Sensitive cases involving decisions which may have a significant and far reaching impact on HMRC policy, strategy or operations may also be considered by the Commissioners. For all cases considered by the Commissioners, the case team makes a submission to the Tax Disputes Resolution Board, who make a recommendation to the Commissioners about how the dispute should be resolved. Caseworkers, along with specialists, attend the Board and Commissioners meetings to answer questions and see the decisions being taken.

Litigation and Settlement Strategy

The LSS sets out the basis on which we will reach agreement in a tax dispute and emphasises the benefits of a collaborative approach in achieving a resolution. The principles of the LSS must be applied consistently in practice to the resolution of tax disputes. This means we will only resolve a tax dispute in accordance with

  • the law, whether by agreement with the customer or through litigation and
  • HMRC’s customer-centric business strategy objectives of maximising revenue flows, whilst at the same time reducing costs and improving customer experience.

For more information see LSS.

Case governance

Each Line of Business (LoB) has a Disputes Resolution Board (DRB) - a decision making body made up of senior tax and other professionals from across HMRC. Case teams refer our larger more complex or sensitive tax disputes and issues to the appropriate DRB for a decision. Referrals are made on behalf of the Director with operational accountability for the case. The secretariat for the appropriate governance panel will assist with this process. As Specialist Investigations’ customers can be drawn from any of the Lines of Business, you may have to refer cases to any of the three LoB Disputes Resolution Boards:

  • Specialist Personal Tax (for example, HNWU customers): SPT DRB
  • Enforcement and Compliance (for example, Mid-size businesses): E&C DRB
  • Large Business Directorate (customers with a CRM): LB DRB

Caseworkers, along with specialists, attend the Board and Commissioners meetings to answer questions and see the decision being taken.

See SIOG1930 for details of SI’s own procedures, including the requirement to submit cases to INQUAT.

See SIOG1920 for an overview of the referral panels and SIOG1940 for a summary of the referral criteria.

Issues governance

Product and process owners (head office specialists) will take all major issues that could impact on more than one customer to the appropriate Contentious Issue Panel (CIP) so a consistent approach can be decided upon. It is therefore vital that you contact product owners if you identify an issue that could affect multiple customers. If a CIP cannot reach a unanimous decision it will refer the issue to the Commissioners. Note that under Managing Avoidance Risks (MAR) all avoidance risks must go to the Anti-Avoidance Board (AAB). If they consider it to have a far reaching impact they can refer it to one of the CIPs.

Further detail

It is important to note that where the case governance remits are triggered and an issue has also been identified, both processes must be followed. The issues governance route must be completed first; this will then inform the decisions of the case governance Board.

Our governance processes should have no adverse impact on customer experience. The Boards and Commissioners meet monthly and extra meetings can be (and have been) scheduled when there is specific need that requires a speedy decision. Customers should be informed that their case is going through internal governance and that it is the Board/Commissioners that make the decision.

Further information can be found on the Tax Assurance intranet site.