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HMRC internal manual

Tax Compliance Risk Management

Managing our relationship with large business customers: working with Low Risk customers: withdrawal of Low Risk status

If we have reason to believe that a Low Risk customer is no longer meeting low risk behavioural expectations, for example, because:

  • they refuse to meet with the CRM,
  • they have entered into tax avoidance schemes,
  • they have not raised a significant tax uncertainty with HMRC in real time,
  • there is a significant deterioration in promptness of returns and / or payments

the CRM will try to resolve this with the customer. If the customer does not make reasonable steps to satisfactorily address the issue within an agreed timeframe then the CRM may withdraw Low Risk status. Any decision to do this must be made with the agreement of the Deputy Director.

In the most serious cases where a Low Risk customer no longer meets low risk behavioural expectations or directly engages in behaviour which in HMRC’s opinion is high risk such as, but not limited to :

  • an aggressive tax avoidance scheme,
  • gross lack of transparency,
  • a grossly negligent error, or
  • fraud

there may be nothing the customer can do immediately to restore HMRC’s confidence. In such circumstances the CRM may immediately withdraw Low Risk status regardless of the current point within the Business Risk Review cycle. Any decision to do this must be made with the agreement of the Deputy Director. The customer’s future behaviour will then be considered through the Business Risk Review process.