UK Tax Strategy

UK Tax Strategy

Qualifying UK companies and partnerships will need to publish their tax strategy online each year.

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Partner and Head of Tax, KPMG in Northern Ireland

KPMG in Ireland

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UK Tax Strategy

Requirements:

Each year, qualifying companies must:

  • Publish the strategy on the internet so that it is freely available to the public;
  • Set out their strategy document either on a standalone basis or as a self-contained part ofa wider document;
  • Ensure that the strategy is available online until the next year's strategy is published.

What must it contain?

The legislation specifies that the strategy must set out:

  • The company's or group's approach to risk management and governance arrangements inrelation to UK taxation;
  • The company's or group's attitude to tax planning;
  • The level of risk that the company/group is prepared to accept in relation to UK taxation; and
  • The company's or group's approach to its dealings with HMRC.

Sufficient detail will be required, therefore a high-level statement is unlikely to be acceptable.

Who is caught?

The scope of the legislation is widely drawn and includes:

  • Groups and companies already within the Senior Accounting Officer regime;
  • UK Partnerships with turnover over £200 million and/or gross assets in excess of £2 billion; and
  • UK subsidiaries of large Irish and overseas multi-national enterprises, regardless of size in the UK, the next year's strategy is published.

Points to consider

Internal issues for Groups

  • If there is an existing strategy, will it be appropriate or will a new UK strategy be required?
  • Which entity is responsible for the publication?

Public perception

  • How will the public react to the strategy?
  • Consider carefully the tone and language used and the impact on relevant stakeholders:
  • e.g. statements around 'paying the amount of tax that is legally due' or 'maximising shareholder returns.'
  • Who in the wider organisation will need to be aware of the requirement to publish e.g. any public relations team.

Does the published strategy reflect the existing tax risk management framework

  • How do you demonstrate that you follow your tax strategy in practice?
  • How will this impact HMRC risk ratings?

Stringent penalty regime for non-compliance:

How KPMG can help

  • Talk through what the regime means for you in practice. practice and how it fits with group tax policy approach.
  • Consider whether your tax control framework meets current expectations.
  • Assist with the drafting of the strategy, adopting 'standard' templates as starting point for discussion.

© 2017 KPMG, an Ireland partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

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