On March 31, 2016 the HM Revenue & Customs published a truly interesting document. The document published is a Draft High Level Guidance on the Publication of tax strategy by Large Businesses.
According to the HMRC the purpose of the Guidance is to explain:
· The qualifying criteria for publishing a tax strategy;
· What a tax strategy must contain;
· When penalties may be charged (including reasonable excuse); and
· The appeals process.
The Guidance discusses a.o. the following subjects:
· Scope of Legislation
o Introduction
o What is a qualifying Large Business?
o What are the qualifying conditions?
o Qualifying Companies
o Qualifying Partnerships
o Qualifying Groups
o What is a UK group?
o What is a UK sub-group?
o What is a relevant body?
o Companies in a group that do not have the same financial year end
o Qualifying MNE Groups
· Publication
o How should we publish the tax strategy?
o When should we publish the strategy?
o Should I notify HMRC when we have published our tax strategy?
o For what period of time must our strategy be published on the internet?
o What if my business is no longer within the scope of the legislation?
· Contents of a large business tax strategy
o What must a tax strategy contain?
o What do we need to publish about our approach to tax risk management and governance arrangements in relation to UK taxation?
o What do we need to publish about our attitude towards tax planning (so far as affecting UK taxation)?
o What do we need to publish about the level of risk in relation to UK taxation that we are prepared to accept?
o What do we need to publish about our approach towards our dealings with HMRC?
o Can CRMs provide clearances?
o Can we include anything else relating to taxation (UK or otherwise)?
o What about commercially sensitive information?
o Do we have to say how much tax the group has paid?
o What do we need to publish in the tax strategy if the group is a multinational?
o Partnerships
· Penalties for failure to comply with the legislation
o In what circumstances is a penalty chargeable?
o Types of penalty:
o What should we do if we are unable to publish?
o How will HMRC assess the penalty?
o What if I don’t agree that I am liable to pay a penalty?
o Appeals Process:
o Late appeals:
o Reasonable Excuse:
Click here to be forwarded to the Draft High Level Guidance “Large Business - Publication of tax strategy” which was published by the HMRC on March 31, 2016 as available on GOV.uk, which will open in a new window.
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