The UK Government has introduced an obligation for qualifying UK companies and partnerships to publish a tax strategy for each accounting period in as far as it relates to UK taxation.
Organisations will need to set out:
The strategy must be placed on an organisation’s website in the form of a separate document or as a self-contained part of a wider document and be accessible to the public free of charge. Penalty measures are also in place to counter non-compliance.
In order to comply with this new requirement, some of the practical issues that you should consider are summarised below:
Internal issues for groups
Interaction with existing tax risk management framework
The issue of tax transparency has become increasingly high-profile. Large businesses have been criticised for appearing to pay less tax in the UK than in other countries and HMRC has been criticised for its settlements with large businesses. Furthermore, under the BEPS agenda, the international rules are being changed to achieve fairer outcomes.
Against this background of increasing public and press interest in tax, and the calls for greater transparency around taxes, in particular public transparency for large businesses, the UK Government has introduced this legislation.
The scope of the legislation is widely drawn and it includes:
An entity is in scope if on the last day of the previous accounting period it exceeded either of the following thresholds, whether on its own or, where appropriate, when aggregated with other UK companies within the same group:
The scope is not extended to open-ended investment companies or investment trusts.
It is the responsibility of businesses to determine whether or not they are within the scope of the legislation.
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