Large Business Strategy

HM Revenue & Customs (HMRC) has developed a specific approach to dealing with large business customers based on an understanding of their particular needs and how they respond.

The current model of relationship management is an efficient risk-based approach to dealing with tax matters and goes back to the 2006 Review of Links with Large Business, in which large businesses identified their priorities from HMRC as certainty, clarity, proportionality and speed of resolution, underpinned by high levels of professionalism and commercial understanding.

2006 Review of Links with Large Business (PDF 242K)

In 2010 HMRC conducted interviews with businesses, representative bodies and stakeholders to supplement the customer feedback gathered from the large business customer survey and to understand better the continuing needs of large businesses. Using this evidence HMRC set out the following objectives which it aims to have fully delivered by the end of 2014-15:

  1. HMRC will invest in a resource-intensive, relationship-managed service for the largest customers, because the money and complexity involved make this the most cost-effective way of getting the right tax agreed early.
  2. All parts of HMRC will work within a common set of risk priorities. HMRC will prioritise the highest risks. HMRC will resource to risk by customer behaviour, by threats to regimes and by size and complexity.
  3. In dealing with those who bend the rules, HMRC will prioritise 'upstream' effort; firstly changing behaviour through policy design and disclosure; then through rigorous case working and where possible within established relationships and finally, where appropriate, through litigation.
  4. HMRC will always seek to work issues in real-time with all customers no matter what their tax strategy, which not only provides earlier certainty for the customer but also allows HMRC to detect avoidance more quickly.
  5. HMRC customers should have, or should buy in, the skills to fulfil their ordinary day to day tax compliance requirements, but HMRC will provide assistance to resolve uncertainty around complex or significant issues and commercial transactions.
  6. All processing for large business customers will be via the normal channels. All contact, compliance interventions and exceptions will be co-ordinated through the CRMs and Customer Co-ordinators, ensuring coherent customer management.

Large business customer survey (PDF 793K)

What HMRC will deliver by 2015

Customers with a Customer Relationship Manager

By fully delivering these six strategic propositions, HMRC’s aim is that most customers with a Customer Relationship Manager (CRM) might say the following in 2014-15:

  • I am up to date with all years closed up to 2012, apart from an issue on EU law that we are litigating. It was difficult to get there, but we achieved it through a willingness on both sides to face some tough decisions.
  • I work with HMRC daily on many significant and commercially important issues - whether HMRC has raised them or because I have raised them because I want commercial certainty. Only rarely does something take longer than expected to resolve, in which case I am made aware of the reason.
  • The main method of communication is now face-to-face or telephone rather than letters. HMRC is transparent about its thinking - where it differs from ours HMRC explains why. I feel that HMRC listens and wants to understand our position.
  • I get a sense that HMRC has a real grasp of the key tax risks from the questions I'm asked. HMRC's officers show a marked improvement in their commercial understanding, applying their tax knowledge to my business and asking about the right things.
  • There is a noticeable improvement in the way that they deal with all risks, in particular with VAT and on Employer Compliance risk issues. HMRC is now much more proactive and drives the risk agenda. The CRMs have improved their focus and I can see a real step change in their confidence and skills in meetings, whatever the tax issue.
  • My relationship with HMRC is professional - we are open with each other and there is trust on both sides. In particular, I can discuss all our potential tax planning opportunities transparently with my CRM in real-time. There's no point in not being transparent and we all want to protect our working relationships.
  • I may buy good ideas from the Big Four/Magic Circle (or other agents and advisers) to ensure that my effective tax rate remains competitive. Even so I avoid aggressive schemes because our relationship with HMRC is too important to risk losing it for a one off saving. Additionally being re-categorised as a non-low risk business is unattractive as I know that HMRC will pursue all risks vigorously.
  • I only contact my CRM when I am dealing with issues that are particularly complex or significant, otherwise my day-to-day tax affairs are managed in-house or through an agent.
  • The big change from recent years is the CRMs' interaction with their technical specialists. I feel that the CRMs now have a grip and are firmly in the centre of everything so that discussions are focused around our business and what is important for us. They make sure we all understand each other, and that issues are resolved as quickly as possible.
  • I feel I am consulted and have a voice - either through the CRM or directly - in changes that HMRC makes and in wider policy change.

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Customers with a Customer Co-ordinator

By fully delivering these six strategic propositions, the aim is that most customers with a Customer Co-ordinator (CC) would say the following in 2014-15:

  • I am up to date with all years closed up to 2012. Only rarely does something take longer than a year to resolve and that's a great improvement. I am always fully informed on the progress of my issues.
  • I work with HMRC on significant and commercially important issues – whether HMRC has raised them or I have because I want commercial certainty.
  • HMRC uses appropriate methods of communication such as telephone and email mainly, rather than letters. HMRC's officers are open about their views and where they differ from ours they explain why. I feel that I know who to contact within HMRC and that when I do they actively listen to me, seek to understand my position and when necessary put me in touch with the right experts.
  • When I deal with tax specialists I get a sense that HMRC has a real grasp of the key tax risks from the questions I am asked. Although contact is not regular, HMRC's officers show a marked improvement in their commercial understanding when I do speak to them.
  • There is also a noticeable improvement in the way that tax specialists deal with all risks, in particular those that are associated with VAT and Employer Compliance risk. When the specialists ask questions they make it clear what the perceived risk is and concentrate on the high risk areas.
  • My relationship with HMRC is professional. We are open with each other and there is trust on both sides. There's no point in not being transparent - they would soon know if I was being less than frank.
  • Whilst I may buy advice from tax agents to keep my effective tax rate competitive, I won't buy aggressive schemes. I can see that there are clear downsides which outweigh the benefits of a one-off saving. Being classed as non-low risk is unattractive as I know that HMRC will pursue all risks vigorously.
  • I only contact my CC when I cannot find answers from the usual channels or I need help finding the right contact in HMRC. Otherwise I manage our day-to-day tax affairs in-house or through my professional advisers.
  • The big change from four years ago is that I have a named point of contact responsible for co-ordinating all contact with me and our business. The CC is aware of the various contacts that I have across the whole of HMRC and has an overview of my business and risk status. The CC helps to ensure we all understand each other and that communications are joined up. When things go wrong the CC helps get issues resolved as quickly as possible.
  • I feel I know how to comment on changes when HMRC consults businesses and on wider policy change - either through the CC, my professional adviser or directly through consultations.

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Litigation and Settlement Strategy

The Litigation and Settlement Strategy sets out the principles within which HMRC handles all disputes about taxes, duties, credits or related interest and penalties, where those disputes are subject to civil law procedures, and whether disputes are resolved by agreement with the customer or through litigation.

Litigation and Settlement Strategy (PDF 28K)

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Taking a programme approach to the highest risk cases

For the very highest risk cases HMRC puts in place dedicated project teams and engages with its customers at Board level through the High Risk Corporates Programme (HRCP) and Managing Complex Risks Programme (MCRP).

For further information see the High Risk Corporates Programme.

The High Risk Corporates Programme

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