Lucy Johnson, Carpetright PLC
Alan Coomer, Multiserve
Mike Holland, Beam Global
Jonathan Good, Dow Chemical Co Ltd
Naomi Ferguson, Local Compliance
Ian Young, Local Compliance
Brigit Bracco, Business Customer Unit (part of meeting)
Martin Hall, Local Compliance
Andy Coe, Risk & Intelligence Service (part of meeting)
Rod Kerr, Local Compliance
1. HMRC welcomed attendees, thanked them for their attendance and commented on the value of these forum meetings to LC. Unfortunately, a number of invitees had to withdraw at short notice.
2. The minutes from the September forum were handed out – it was noted that things had moved on substantially since then.
3. HMRC noted that things have moved on rapidly over the past few months. Local Compliance (LC) handles c14,000 businesses meeting the EU large definition and need to provide the appropriate an service across a wide spectrum of businesses. Customer managers are being introduced for larger companies.
4. HMRC gave a presentation on the wider perspective across the whole spectrum of businesses, not just those in LC. Review of Links with Large Business (RLLB) is not just about the 14 proposals but improving the way HMRC engages with business.
5. Four main themes came out of the review – certainty, resourcing to risk, speed of resolution and clarity through effective consultation.
6. HMRC wish to ensure the UK plc is a good place to do business. The recommendations in the November 2006 report are being delivered.
7. Real time conversations are being undertaken and the Advanced Agreements Unit (AAU) went live in October 2007 and the new Non-Statutory Clearances regime goes live on 1 April 2008. The Risk Framework document has been published and guidance is being issued with any new legislation.
8. More informal meetings, such as this, should be held to gauge opinion and inform the implementation of RLLB. The new ways of working are also being reflected in the training of HMRC staff.
9. Low risk cases will get the ‘light touch’ not ‘no touch’ as there may be particular transactions or events which are out of profile with the overall risk. Resources will be focussed on high risk companies and HMRC will seek to influence behaviours.
10. There will be no more cyclical reviews from employer compliance, in future interventions will be focussed on specific risk areas.
11. HMRC are engaging in a major cultural change to improve its commercial understanding engage with business. This is a two way process and where businesses and HMRC can develop open relationships then benefits will arise. It will take time to build these relationships and deliver the cultural changes needed.
Accountability - specific measures have been published in the 2008 Budget that commits HMRC to the following:
12. Moving businesses between LC and LBS is underway. The cut off point between LC and LBS has been agreed at a turn over of £600 million or £2 billion assets. Customer managers have now been appointed and the process of moving cases will began on 17 March and should be completed by 31 May.
13. Guidance has been given to the customer managers and tax specialists are being appointed to work with them.
14. The current service level for those cases coming from LBS will be maintained and HMRC do not envisage any changes occurring for them in the long term. The risk strategy will be consistent with the LBS risk strategy but will require some adaptation to meet the wider business base in LC.
15. Clearance regime – this deals with non-statutory business clearances. A pilot has been running in the retail sector in the North West and Midlands Area to test the robustness of the systems. The system is now going live nationally and a new guidance manual is going onto the Internet.
16. Transfer pricing – new internal structures based around a rigorous selection of cases for intervention coupled with active case management and the use of specialist resource are being introduced. This approach was welcomed by the business representatives if HMRC were open about the issues of concern.
17. Customer management is being extended during 2008 to businesses already in LC and appropriate cases are being identified. Where possible existing relationships will be maintained.
18. For businesses without a customer manager proposals are being developed on contact channels and relationships.
19. Guidance has all ready been issued for the LBS businesses arriving in LC. The main aims are consistency of treatment and a more open ‘cards on the table’ approach.
20. Customer mangers in LC will begin to risk score in accordance with the LBS framework whether a business is high or low risk.
21. It was noted that the relationship must be two way and thoughts on how feedback on a CMs performance could be obtained were discussed.
22. For businesses where customer managers are not appointed a risk strategy is being developed to ensure an approach consistent with RLLB principles.
23. HMRC gave an update. EC were moving away from the cyclical enquiries to a risk based form of intervention.
24. Action plans will be shared with businesses and system assurance will be more focused. The focus will be on establishing the risk status and the company will be asked to resolve any system errors identified. A judgement will be required on the nature and extent of the errors in determining the approach required.
25. It was noted that problems are caused by changes in legislation that were difficult for companies to understand or implement. HMRC advised that it is willing to talk and listen if companies came forward willingly and disclosed any problems or doubts in the way they have been operating PAYE (Pay As You Earn).
