Large businesses in the UK: publish your tax strategy

On 24 June 2016 HMRC published an overview guide for large businesses (with a turnover above £200 million or balance sheet over £2 billion), on the requirement to publish their tax strategy before the end of the next financial year commencing after Royal Assent to Finance Bill 2016, and yearly thereafter.

If you’re a UK company, partnership, group or sub-group, you’ll need to publish a tax strategy if in your previous tax year you have either a:

• turnover above £200 million
• balance sheet over £2 billion

For groups and sub-groups, it’s the combined totals of all the relevant bodies that you must use.

This is separate to the 2014 Organisation for Economic Co-operation and Development’s (OECD’s) ‘Country-by-Country Reporting’ model (CBCR). A business not headed by a UK company not meeting the threshold in its own right may still qualify if they satisfy the OECD’s CBCR framework threshold of a global turnover of more than €750 million.

The tax strategy shall explain your business’s tax arrangements. If your business is part of a multi-national group, you should publish any strategy, or parts, relevant to UK tax.

You should work out and include what tax risks are linked to your business’s size, complexity and any changes to your business.

Other information on governance arrangements to include:

• details on how you manage your business’s tax risk
• a high level description of key roles and their responsibilities
• information on the systems and controls in place to manage tax risk
• details on the levels of oversight of your business’s board and its involvement

If your business has a code of conduct you should include details of it.

You should also include:

• why you might seek external tax advice, if any
• an outline of your tax planning motives
• the importance of each to your tax strategy

Where your business forms part of either a group or sub-group, you should include the group’s overall approach to structuring tax planning.

You should say if your business’s internal governance has rigid levels of acceptable tax risk. If so, you should explain how it is influenced by stakeholders.

You must make your tax strategy available free of charge on the internet.
Your first strategy should be published before the end of your first financial year commencing after Royal Assent of Finance (No. 2) Bill 2016.
Read more here.