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Publication of tax strategies

This new requirement applies for financial years beginning on or after 15 September 2016.

The requirement to publish a tax strategy applies to UK headed groups, UK sub-groups of multinational groups, standalone UK companies (including UK permanent establishments of foreign entities) or UK partnerships, if in their previous financial year they had either a turnover above £200m and/or a balance sheet over £2bn.  For groups and sub-groups, this is the combined totals of all members.  Multinational groups will also be caught if they have a global turnover of more than €750m. 

The strategy must include four key elements:-

  • The approach to risk management and governance arrangements in relation to UK taxation;
  • The entity’s attitude towards tax planning insofar as this affects UK taxation;
  • The level of risk that the company is prepared to accept in relation to UK taxation;
  • The approach of the company in its dealings with HMRC.

The tax strategy must be made available free of charge online either as a separate document or a self-contained part of a wider document.  It must remain available until the following year’s strategy is published.  There is no legislative requirement to advise HMRC when a tax strategy is published but HMRC have asked that they be informed.

A penalty will be charged for failure to comply; up to £7,500 for the first six months; a further penalty of up to £7,500 for the next 6 to 12 months; and £7,500 for every additional month over 12.

 

 

Date: 14th October, 2016
Author: Cathy Corns

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