Guidance

HMRC's compliance approach for large businesses

Understand the approach HMRC uses to work with large business customers.

Who we work with

HMRC’s Large Business Directorate works with around 2,000 of the UK’s largest businesses to make sure they pay the correct amount of tax.

The directorate works with most businesses in the UK:

  • with an annual turnover of more than £200 million
  • with an annual turnover below £200 million with complex tax affairs
  • operating within a business sector that is complex

This is to ensure a consistent treatment across these sectors.

What we do

We use an efficient risk-based approach when we work with our customers, including large businesses.

With large businesses, the amount of money involved and the complexity of the tax affairs, means we take a more resource-intensive approach.

HMRC are investigating the tax affairs of around half of the UK’s largest businesses at any one time.

We’re more hands-on with large businesses because of their size, complexity and the large amounts of tax at stake.
When large businesses collect taxes from their employees and customers, such as VAT and PAYE, they account for around 40% of the total tax revenue collected by HMRC.

We work with the highest-risk businesses at board level through our High-Risk Corporates Programme.

Professional standards for HMRC’s compliance work, set out how we should apply the HMRC Charter and Civil Service values in our compliance activity with large businesses.

Customer Compliance Managers

HMRC uses a customer compliance management model to build an in-depth knowledge of the businesses we work with.

We also learn about the economic and commercial environment in which businesses operate, their approach to risk, and their internal governance.

We assign a senior professional called a Customer Compliance Manager to each of the UK’s largest businesses. Their primary role is to make sure businesses pay the correct amount of tax, at the right time.

Customer Compliance Managers have a detailed understanding of the tax risks relating to each business and are supported by:

  • specialists for all tax regimes
  • data analysts
  • solicitors
  • audit specialists
  • trade sector experts
  • forensic accountants

Tax compliance risk management

HMRC’s approach to helping Large Business Directorate customers manage their tax compliance is to: 

  • build and maintain effective relationships with customers 
  • classify customers by level of risk so that HMRC can best target resources 
  • help customers understand their risk rating, agreed as part of the Business Risk Review 

We decide businesses’ overall level of tax compliance risk by considering: 

  • the inherent risk the business represents (for example, its size, complexity and the amount of change it is subject to) 
  • whether the business effectively mitigates this risk through their behaviour (for example, their approach to tax compliance and their openness with HMRC) 

HMRC’s Framework for Co-operative Compliance explains what it expects from large businesses, and what they can expect from HMRC. HMRC views continued compliance with the framework as an indicator of lower-risk behaviour, and non-compliance with the framework as an indicator of higher-risk behaviour. 

Business Risk Reviews

A Business Risk Review (BRR) is a risk assessment that takes place between a Large Business Directorate customer and HMRC. The customer compliance manager conducts the Business Risk Review. The purpose of the review is to: 

  • agree the overall risk rating and risk status of the business 
  • decide on any action needed to reduce the risk rating 

  • decide how much resource and scrutiny the business needs 

If a businesses’ risk rating is low, we will conduct a Business Risk Review every 3 years. If the risk rating is moderate to high, we will conduct a review at least once a year. 

Customers with low risk status can expect to have more certainty that HMRC will not question returns and declarations, and in general for HMRC to not initiate interventions, aside from certain interventions which potentially apply to all customers. 

Where we believe that a customer is either not managing tax compliance risk adequately or takes a position which represents a significant risk, we will deploy the full range of specialist resource across HMRC and work intensively with the customer to enable rapid reduction in their risk profile. Regardless of risk rating, HMRC will aim to develop an open and collaborative relationship with customers as we believe that is the best way of managing their tax compliance risk. 

In 2020 HMRC introduced an Annual Conversation with all customers not receiving a BRR. These provide businesses the opportunity to discuss business developments with HMRC and raise any issues. 

How we resolve tax disputes   

For large businesses we take the same approach to resolving tax disputes as with all taxpayers, whether that happens through them settling with us or through litigation in the courts. The majority of tax disputes are resolved following collaborative work with the business and by agreement. HMRC will not settle for any amount less than we would reasonably expect to obtain from going to court.    

Tax disputes are resolved in accordance with the law, as set out in our Litigation and Settlement Strategy (LSS). The LSS is the framework HMRC uses to resolve tax disputes through civil law processes. It applies to all taxpayers and large or small businesses, whether dispute is resolved by agreement or through litigation.   

Decisions are made under our published Code of Governance, overseen by the Tax Assurance Commissioner, who has no role in running the teams dealing with tax disputes and who publishes an annual transparency report for all taxpayers in the UK.    

HMRC’s work to resolve tax disputes is subject to independent scrutiny by the National Audit Office, reporting to Parliament.

More information

You can find statistics about the outcome of HMRC’s large business compliance work.

HMRC use a range of measures to make sure multinationals pay the right amount of tax on the share of their profits arising from their economic activities in the UK. Transfer pricing rules and Diverted Profits Tax are 2 important elements.

Published 12 November 2014
Last updated 2 July 2021 + show all updates
  1. Updated Introduction text. More information section added.

  2. Updated with the latest information on the role of HMRC Large Business, and how to contact them.

  3. First published.