2006 Review of Links with Business
The Chancellor has today announced the outcomes of the 2006 Review of Links with Large Business, chaired by Sir David Varney, former Chairman of HMRC.
The review addresses key business concerns through proposals which will deliver:
- Earlier certainty about the tax treatment of transactions;
- An efficient risk based approach to dealing with tax matters which will be less time consuming for business by ensuring a focus on key risks;
- Speedy resolution of issues which will be more cost effective for business; and
- Clarity through effective consultation so the business perspective informs HMRC decisions.
The review has involved extensive and transparent consultation with business, representative and professional bodies further details of which can be found at http://www.hmrc.gov.uk/large-business/consult.htm
The report is proposing a framework within which business and HMRC can work together to improve the nature of the relationship. The main proposals are:
- An advance rulings process about the tax consequences of significant investments and corporate reconstructions, and the extension of existing clearance practices for significant commercial issues – giving UK and international business easier, earlier and speedier certainty
- A more transparent approach to risk assessment, informed by an understanding of how business assess and manage risk, to underpin an enquiry approach where resources are focused on key risks and resolving contentious issues more efficiently and quickly
- A requirement for HMRC to take the business perspective into account in everything it does from implementing policy decisions to designing systems and processes – giving earlier clarity and reducing complexity and administrative burdens for business
Sir David Varney said: “This review set out to address the concerns of business about the nature of the relationship with HMRC. I am confident that the proposals put forward, while challenging, will meet these concerns and will fundamentally transform the relationship with benefits for both business and HMRC.”
Business representatives have fully endorsed the proposals in the report, recognising that delivery represents a challenge for both HMRC and business and that commitment is needed from business and their advisers to work with HMRC to achieve successful delivery.
An Advisory Board will be established and will include senior representatives from business and HM Treasury to oversee delivery of the proposals and report progress. A delivery plan is being developed and will be published prior to Budget 2007.
The full report can be read here: 2006 Review of Links with Large Business Report (PDF 217K)
Update
Key Proposal 5 of the 2006 Review of Links committed HMRC to publishing the roles and responsibilities of the Large Business Service Sector Leaders and Client Relationship Managers, as well as details of the escalation route for resolving contentious issues.Key Proposal 9 committed HMRC to publishing the structure of the consultative forums by 31 December 2006
