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HMRC internal manual

Tax Compliance Risk Management

Risk Assessment: Agreeing the risks to be taken forward

As Tax and Audit Specialists identify potential risks as a result of their Risk Assessment activity, they should enter those they believe to be worthy of team discussion onto the Customer Relationship Management Module which will calculate a Priority Risk Score (PRS). The PRS is used to determine whether a risk is significant enough to be raised with the customer based on the value, probability and impact of the potential risk. Further information on the Customer Relationship Management Module and Priority Risk Scores can be found in the Customer Relationship Management Module guidance.

Led by the CRM, the whole HMRC team including all the Tax, Audit and other relevant specialists, such as Transfer Pricing Specialists, should discuss these potential risk areas to agree which should be raised with the customer (informed by the Priority Risk Score) and what, if any, further Risk Assessment activity is required. Ideally this discussion should be done as a single group to maximise the opportunity for knowledge sharing and cross-tax challenge but there may be practical reasons why this will not always be possible, for example, the geographic spread of specialists makes this uneconomic. In these cases CRMs will need to make a judgment on how best to achieve a well-informed Risk Assessment which makes best use of the knowledge spread across the whole team.