HMRC internal manual

Tax Compliance Risk Management

TCRM3344 - The Business Risk Review (BRR+): Business Risk Review (BRR+) Assessment indicators: Risk Assessing Across Taxes: Approach to Tax Compliance

Approach to Tax Compliance is about assessing the customers’ tax strategy and relationship with HMRC. The CCM and Tax Specialists should consider how open and transparent the customer is, as well as any evidence of tax planning that does not support genuine commercial activity or is contrary to the intentions of Parliament.

HMRC operates a CCM model for our largest customers because we recognise that our customers have a range of diverse and complex needs. Our aim is to form a collaborative relationship which allows our customers to pay the right tax at the right time. The benefits of this model include the ability to examine unusual or complex transactions in real time, this allows HMRC and the customer to come to a shared understanding of the correct tax treatment in good time. This arrangement requires an ongoing commitment from both HMRC (whose interactions will be led by the CCM in this case) and the customer.

Low Risk indicators 1 to 4 may involve an increased level of interaction between the customer and HMRC, requiring both parties to work together in order to form a transparent relationship that facilitates a positive approach to tax compliance. Low Risk indicators 5 to 8 place the onus on the customer to structure their business interactions in a way that promotes tax compliance.

Additional Information on Low Risk Indicators

Low Risk Indicator 7 - Examples of illicit trade include human trafficking and forced labour, illicit financial flows, counterfeiting, illegal drugs and the illicit trade of genuine goods (e.g. smuggling), counterfeit goods or duty-not-paid goods. This is not an exhaustive list.

The Approach to Tax Compliance risk indicators are contained within the below document along with expectations as to when a customer would be Low Risk, Moderate Risk, Moderate - High Risk and High Risk.

Approach to Tax Compliance Risk Indicators