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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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
- 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
- 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
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
- 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.
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)
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