Large Corporates Forum (LCF) meeting 09 October 2007

Attendees:

Corporates:

British American Tobacco Ken Hardman
British Telecom Stephen Clayton
Corus Rebecca Reading
EMI Group plc Duncan Bratchell
HSBC Chris Spooner
Orange Barry Cannings
Rolls Royce Mike Sufrin
Scottish Power Patrick Hicks
UBS Peter McFie
XL Group of Companies Mervyn Skeet
British Retail Consortium Raina Miles
Capita Sharon Bowen
Diageo Jon Harlow
HHG PLC Ashleigh Kewney
ICI plc Philip Gillett
Rentokil Chris Filby
Schroders plc Susan Cooper
Tesco Tim Voak
ConocoPhillips (UK) Ltd Chris Gautrey
HBOS Susan Walker

Speakers:

Geoff Dickinson Head of Risk and Resource Unit, LBS
Janet Alexander LBS
John Archbold LBS

HMRC:

Melanie Dawes, Director Large Business Service (Chair)
Andrea Hargreaves, LBS (Secretariat)
Ian Valentine, LBS
John Johnston, LBS
Iain Macniven, Business Customer Unit
Ian Stewart, LBS
Judith Knott, Business Customer Unit
Richard Steele, LBS

Welcome, update and matters arising

Melanie welcomed everyone to the meeting, explaining that this meeting allowed LBS to present to members three of the big challenges facing LBS and to seek their comments

Risk Framework
Customer Population
Geographical Restructuring

There were no matters arising and the minutes of the last meeting were agreed

Approach to Compliance Risk Management for Large Business (PDF 71K)
Geoff Dickinson, LBS

Geoff started by introducing Richard Steele as the new Head of the Risk and Resource Unit. He provided members with an update on the events to date; starting with the creation of the LBS and development of the Operating Model to the publication of the Risk Framework and current activity in the revision of the Risk Guidance and underlying instructions. There has been extensive consultation with Agents, members of the LCF, internal stakeholders and other customers during the development of the Risk Guidance and this continues. Key points of the presentation and discussions

Key to what LBS is trying to achieve is the need to have better working relationships with customers founded on mutual respect, trust and transparency.
Change will not be achieved overnight and while LBS would like to get it right first time, it needs to be accepted that there will be occasions where this won’t happen.
The change in approach will be supported by better quality management information and by customers and LBS working collaboratively to deal with risks as they arise.
LBS needs to rely on customers’ sytems, processes and governance and a sub-project has been set up to look at what this means in practice - will engage customers in that work pretty quickly and would like it to be completed in three to six months.
Decisions on the population have now been made; this will help.
There is good progress against the targets on reducing the number of low risks, closing old risks and completing risk reviews with customers. There is still more to do.
More work is needed on understanding the resource costs of the activity LBS undertakes and the information should be available in a matter of months that will allow this to start to happen.
There are some outstanding issues raised by customers and Agents such as understanding the benefits of being low risk, what collaborative working processes are needed, what information customers need to supply to justify low risk status and improving the clarity of the HMRC position on tax planning / avoidance.
The new ways of working require big changes in the way our people work and a series of workshops, awareness events and a facilitated programme of events where line management and tax communities come together to explore specific issues has begun to generate buy-in.
Members were confused by high risk and low risk and how low/high risks (as in enquiries into specific areas) equate to a customer being high/low risk. There was a suggestion that individual risks are renamed ‘issues’ to prevent confusion with the term in relation to customers. It was agreed that this was an area that LBS needed to look at.
Can you still be low risk and have lots of issues? While something may be quite high risk due to financial implications, it was felt that this shouldn’t make a customer high risk if there was openness/discussions otherwise this could end up preventing effective working relationship. Melanie and Geoff agreed that customers could indeed have some high risks within the business while still retaining low risk status; each case would be judged on its merits.
The recent customer experience survey had highlighted customer concerns that the largest LBS businesses could not be deemed as low risk; this was not the case and any size of business has the potential to be deemed low risk where there is proactive transparency and strong working relationships.
Members believed it was dangerous to say low risk equals no interventions; there may still be lots of work needed and customers would be concerned if being low risk meant a reduction in customer service. Melanie explained that LBS people had also raised this and it was not intended that contact with customers would stop as a result of being low risk; it could, at the customers request, increase
Members agreed there was great progress being made with small issues but thought that it was now getting harder as the easy things have been dealt with. There was also some concern that the concentration on old risks has meant a slowing down in the resolution of newer risks

Action Point 1/Oct 07 – Richard and Melanie to review the use of ‘risk’ in different contexts

In summary, Geoff explained that there was a long way to go and that there was a need for long-term and sustained development to get where LBS needs to be. It would be useful to get feedback from customers about how it feels for them and any thoughts on the outstanding issues

Members thanked Geoff on where LBS has got so far and for the collaborative way in which the Framework and guidance had been developed.

LBS Change Programme (PDF 56K)
Janet Alexander, LBS and John Archbold, LBS

Janet explained that customer polulation and geographical restructuring were two huge change projects. The aim of today was to show LCF how we were managing the changes and to provide members with an opportunity for questions and comments. Main points during the presentations and discussions

There were LBS people in offices where there were few or no other LBS staff present; this causes many difficulites including a lack of flexibility and problems creating strong team working.
Customers are telling LBS, through their Client Relationship Managers (CRMs) and through the recent customer survey, that there are different levels of customers service and that this was particularly apparent where customers had some taxes dealt with by Local Compliance and some by LBS.
LBS is clear that it needs to mitigate the impact of changes to the customer population; we are fully aware that changes to the CRM and / or the tax specialists are the things that customers most hate and the churn of staff is the highest risk for the population project
The agreed criteria and split of customers between LBS and Local Compliance had been agreed and published on Friday 5 October.
A communications package is currently under development to support CRMs and Sector Leaders who will be responsible for informing customers of moves into / out of LBS.
A high number of businesses leaving LBS are EC only. Around 250 in for one tax will move out to LC and a similar number will come in.
While the original intention may have been to co-locate staff in fewer offices by March 2008, actual moves will take longer to allow LBS to maintain continuity of CRMs and their business teams.
Co-location of teams is not something that LBS can do in isolation, it requires coordination with the Estate Services teams. The Project Manager is working with them on this.
When asked what percentage of customers will change CRMs or are in ‘wrong’ location. It was explained that CT is mainly in the right location; the main problem is with indirect tax as they have more sites. In total, around 75% of LBS people were in the right place with a further 10 – 15 per cent within daily travelling distance
Members did not want LBS to over-estimate that VAT / Corporation Tax (CT) in same location is a real benefit to customers although they could see that Risk Assessment would be easier. Janet explained that previous trials of closer working did highlight improved commercial awareness by HMRC where there was co-location; something that customers continue to tell us is an area for improvement

Any Other Business

Co-chair - Adam Little has stepped down as co-chair of LCF. Melanie had discussed this with Tim Voak who challenged the question – do we need a co-chair? Members did not believe there was a strong need for a co-chair and were happy that Tim co-ordinates LCF members views where necessary.

Agenda – This has been mainly driven by LBS although members are asked if they have topics they would like to see included. Members were happy with this arrangement and would say if the right issues were not being picked up.

The meeting finished at 14:40. The next meeting

14 February 2008
100 Parliament Street.