Roles and responsibilities of local compliance customer managers

Dealing with large businesses and how contentious issues for those businesses will be resolved


The report 2006 Review of Links with Large Business (RLLB), published on 17 November 2006, proposed that HMRC will make clear to business how contentious issues will be resolved in a more efficient, less confrontational way and ensure that the mechanisms for dispute resolution work effectively. This includes establishing clear accountabilities and authorities.

This proposal is part of a wider review focused on outcomes designed to improve the attractiveness of the UK tax administrative environment.

Large Business Service (LBS) deals with the largest UK companies, employers and partnerships, and has already published (December 2006) a guide to the Roles and Responsibilities of Client Relationship Managers (CRMs) & Sector Leaders and escalation routes where businesses are concerned about the handling of their issues.

Consultation and research is underway on how best to use Local Compliance resources to enhance customer contacts and engagement with Large Businesses.

This paper takes account of the feedback received so far. It sets out Local Compliance’s response to how it proposes to manage its relationship with large business and the escalation routes via which issues or disputes will be resolved.

Large Businesses dealt with by Local Compliance

Local Compliance deals with the tax affairs of around 14,000 ‘large’ businesses within its Large and Complex customer business stream.

The population is diverse in terms of size, structure and complexity, ranging from major multinationals with many subsidiary companies and thousands of employees, to single UK companies. Many are represented by agents. The service and compliance needs of these businesses and the degree of contact with HMRC vary significantly and entail a range of responses.

Customer management in Local Compliance

The key aims of Local Compliance’s approach to dealing with large businesses are to both implement the Review of Links with Large Business and to provide a cohesive response across different heads of tax.

All large businesses will have their relationship with HMRC managed, though the service and compliance needs of those businesses will vary.

Making contact

Initial consultation suggests that the vast majority of large businesses are not looking for regular contact with HMRC managed by a CRM. For most contact is infrequent. But when it does it occur it may involve issues which are not easy to resolve through HMRC’s normal contact channels. Consultation suggests that there is general demand from large businesses for easy access when needed to appropriate levels of expertise and skills for the various taxes and duties to support compliance and the swift and early resolution of areas of significant tax uncertainty.

We are currently reviewing the efficiency of the contact routes into HMRC for large business, particularly where there are no current interventions or issues, to see whether these may be improved. Our aim will be to provide a mechanism which will allow large businesses easy access to an appropriate contact in HMRC where they don’t already have one.

Customer manager

Local Compliance deals with some businesses which are very large and complex. They include the highest risk cases and those with risks across different heads of tax, but also businesses which can be categorised as low risk but have very complex affairs which require frequent interaction with HMRC. Some will have previously been dealt with by the Large Business Service.

For these businesses, the allocation of a named Customer Manager (CM) is appropriate both to provide a consistent level of customer service and to enable Local Compliance to better focus on risk and compliance.

Large businesses which have significant issues across different heads of tax will also be able to deal with a CM to address those issues if desired. This will facilitate the sharing of information within HMRC, remove the need for businesses to duplicate responses, inform the risk review process, and there will be a clear point of responsibility for resolving ongoing issues and a ‘one stop shop’ approach if desired.

In practical terms, where a CM is appointed the business and its advisors will be informed that the CM is available as a point of contact who can resolve issues and facilitate HMRC’s responses across all taxes and duties.

The CM will be a tax specialist for the business for either direct or indirect taxes, depending on their technical background. The business can opt to either deal with the CM for all heads of tax or to contact HMRC through the business’s individual tax specialists for each regime if desired. However the CM will retain responsibility for co-ordinating HMRC’s responses so long as issues remain unresolved and for ensuring that information is utilised efficiently across heads of tax.

The role of the CM will include being responsible and accountable for the following key functions;

  • Ensuring that the business’s needs for advice are met by the appropriate specialist, in line with our legal framework and codes of practice.
  • Preparing an integrated risk assessment for the business and then sharing HMRC’s view with the business.
  • Identifying and resolving any differences of view and to agree with the business, via action plans, how the issues identified will be tackled.
  • Responding to requests for clearance from the business in a timely way.
  • Keeping business informed about how their issues are progressing and when they can expect a response to a request.
  • Being the lead direct or indirect HMRC tax specialist for the business, depending on their technical background.

In addition, the CM will be able to arrange systems overview, highlighting aspects of systems with tax implications.

The CM will not therefore be a technical specialist in all disciplines and will, in the main facilitate and co-ordinate HMRC’s responses via contact and co-operation with other tax specialists. The CM will however be the point of contact to deal with any concerns that the business has over its dealings with HMRC and have authority in general terms to resolve disputes.

The CM will be both a facilitator and enabler, giving businesses the opportunity to obtain early certainty and to work in ‘real time’ where it is appropriate to do so.

The frequency of contact with a CM will be driven by service demands and the tax risks to be addressed.

For many large businesses, contact with a CM may be infrequent or the role may be short lived. There may be no further need for a CM once issues are resolved. In these circumstances, our aim will be to capture our knowledge of the business and contact to inform and provide continuity in any future contact.

For some large businesses the CM role will be very similar to the CRM role in LBS. The CM will provide continuity for the business in their dealings with HMRC and will, through regular contact and constructive dialogue, develop increased understanding of the business and its commercial drivers.

We are aiming to begin introducing the CM role at the end of the year. CMs will begin to contact businesses and their advisors from that time to introduce themselves and agree the framework within which the relationship will be conducted.

For large businesses with CMs we are also considering the allocation of those businesses to a sector in line with those identified by LBS. Responsibility for those cases will not migrate to LBS but Local Compliance CMs will be able to more easily develop commercial sector awareness thereby enabling a more focused assessment of risk.

Tax specialists

Where large businesses dealt with in Local Compliance have issues or risks in only one tax regime, such as CT or VAT, these will be addressed via the relevant tax specialist within that regime.

The tax specialist will manage the relationship with the business in accordance with published guidance and Codes of Practice and implement the RLLB framework, including agreement of the view of risk and how issues will be addressed. The role will be similar in many ways to the current case owner or assurance officer roles and there will be no need for the co-ordinating role described above. The relevant tax specialist will have authority in general terms to resolve issues within their regime.

We estimate that the great majority of large businesses dealt with by Local Compliance will generally have regime specific issues or risks that will, as now, be handled by the relevant tax specialist.

Other HMRC specialists

The majority of tax technical work in Local Compliance will be carried out by the relevant tax specialist in IT, CT, VAT, Excise, International Trade or EC, under the direction of the Customer Manager where appropriate. The CM or tax specialist may also from time to time bring in other specialists such as accountants, valuers, head office technicians, international issues managers or senior case consultants. In all cases the CM or tax specialist will be responsible for keeping the business informed of how issues which have been referred to other specialists are progressing.

Team Leader role

The individuals responsible for managing HMRC’s relationship with its large business customers as described above will generally be managed by team leaders. Team leaders are responsible for the quality of HMRC’s interventions and customer service and also provide strategic and technical advice.

Business Unit Head role

Business Unit Heads are generally responsible for the quality of HMRC’s interventions and customer service within their business units and directly manage the team leaders.

Resolution of issues

Issues should be dealt with in accordance with published practice and guidance, within the statutory framework and in accordance with HMRC’s Litigation and Settlement Strategy, which sets out high level principles for bringing tax disputes to a conclusion whether by agreement or litigation and covers all taxes and all directorates.

At the beginning of an intervention or review the Customer Manager or tax specialist will discuss and agree with large businesses how issues are to be tackled, including timeframes and escalation routes. In general terms, the individual with responsibility for customer management as described above will be responsible for deciding HMRC’s position on any particular matter. However, where an issue turns on a novel or contentious technical interpretation or there is uncertainty, the CM or tax specialist may need to consult with his or her manager or with the relevant head office or sector specialist. In all cases the business or its advisor will be kept informed.

The Customer Manager or tax specialist will have overall responsibility for progressing issues once decisions have been made. Where decisions are implemented, there will, as now, be recourse to review, for example on VAT or Excise issues, or to litigation.

It is expected that the vast majority of issues affecting large businesses that are dealt with in Local Compliance will, as now, be settled by agreement and escalation will be relatively rare. However where there is concern or dissatisfaction with the approach taken to resolve an issue, the business or its advisor should contact the team leader in the first instance setting out clearly the cause for concern.

The team leader will acknowledge and review the matter and respond within a set timescale. If the issue still cannot be resolved the Business Unit Head can be asked to further review the matter and respond to the business. Where there is still concern or dissatisfaction the matter may be referred to the Director’s Office via the Business Unit Head and thereafter or at any point to the Adjudicator if required.

Further work and feedback

We are currently reviewing the efficiency of the contact routes into HMRC for Large Businesses, particularly where there are no current interventions or issues, to see how these may be improved.

We will be designing and delivering training to our staff and identifying the skills and knowledge required to deliver the Customer Manager and tax specialist roles described above.

We are planning to implement Shared Workspace within the Large and Complex customer stream, initially as an internal tool, to facilitate the integration of our activities and knowledge across heads of tax.

Feedback on these issues as well as the wider proposals within this document are welcome. Please forward any comment, suggestion or feedback to Pauline Chelmsford.