Large Business Risk Review

HMRC on 13 September 2017 published a consultation on potential changes to HMRC’s risk profiling of large business Large Business compliance – enhancing our risk assessment approach. The closing date for comments is 6 December 2017. 

The Business Risk Review (BRR) is a core feature of how HMRC manages the tax compliance of the largest businesses. Customer Relationship Managers (CRMs) currently conduct a periodic BRR of each large business, assessing their risk profile and placing them into a binary ‘low risk’ or a ‘non-low risk’ category. This assessment is a key determinant of the level of scrutiny and resource the business receives from HMRC. The process, while still effective, has undergone limited change since its introduction 10 years ago. 

HMRC is now seeking views on how a refreshed BRR approach, potentially with more (e.g. 4-5) risk categories tailored to the tax risks encountered in the large business population, will support:

1. HMRC maintaining a shift in large business compliance behaviours; and

2. providing greater clarity and confidence for large businesses – for example, the BRR could place businesses into a low risk, low-moderate risk, high-moderate risk, high risk and significant risk category.  

The consultation looks at:

  • the current BRR process;
  • the content considered within the risk review process;
  • the results of the BRR, and whether this can be enhanced to provide better clarity and drive more open discussions; and
  • the outcomes and potential opportunities that may exist for their use. 

HMRC wrote earlier this year to large businesses setting out the principles to underpin a framework for cooperative compliance which covers the way in which the two sides should work, business governance and tax planning and also risk management which is now explored in much greater detail in the latest consultation.