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HMRC internal manual

Tax Compliance Risk Management

Risk Working: Action Plans: general

All significant interactions with a customer should be clearly planned and, where possible, agreed with the customer, identifying specific milestones and accountabilities. This will ensure that there is mutual understanding of how everything should be taken forward so that matters are resolved as quickly as possible.

A significant interaction is one where, at the outset, the interaction is not expected to be completed within thirty days. These can include mandatory work, clearances and other customer-initiated work. Risks requiring interaction with the customer will normally be identified as part of the Risk Assessment process but can also include matters raised by the customer. Action Plans (APs) for each risk build up into a picture of how compliance activity for the business as a whole is being managed. They provide an opportunity for both parties to influence the timetable to avoid other peaks of work and so limit the burden of compliance for both HMRC and the customer.

CRMs are responsible for ensuring that APs are put in place but Tax and Audit Specialists should also be actively involved in developing the detail and ensuring that they are kept up to date. Where other HMRC and LB stakeholders are involved in the delivery of the Action Plan they should be consulted about its contents to ensure that the targets set are achievable. For example, for all instances of disclosed or suspected avoidance the relevant Special Project Manager should be consulted.

APs should, where possible, be agreed with the customer but even where this is not achieved one should be put in place by the CRM to manage HMRC activity and to let the business know how we will progress the risk. The AP forms an integral part of the Business Risk Review so the CRM should confirm on the BRR template that the AP has been shared with the business. If no AP can be agreed or the customer fails to deliver on a milestone or action, early use of statutory powers to progress the risk must be considered and applied as appropriate.

To ensure that the AP is more than just a list of proposals and good intentions, the following should be included:

  • each action should be attributed to a key person who is ultimately responsible for its completion;
  • an ambitious yet achievable timescale;
  • appropriate activities or actions and stage milestones;
  • deadlines for use of statutory powers so that these are not exceeded should it not be possible to resolve a risk without recourse to these powers.

An AP should be a living document used to support a normal work process and should increase both parties’ confidence that a risk will be resolved as quickly and efficiently as possible; it should not be an end in itself. However, in order for it to be of any benefit an AP needs to be kept up to date and reassessed or amended in line with developments or changing circumstances.