BKM507550 - HMRC operation of the Code: governance

Examples of what Code compliant governance looks like
  1. »Ê¹ÚÌåÓýapp bank’s strategy for tax management reflects the commitments made under the tax planning part of the Code.
  2. »Ê¹ÚÌåÓýappre is a clear policy and process in place for ensuring that the bank’s strategy for tax management is applied in practice.
  3. »Ê¹ÚÌåÓýapp bank’s policy and process for tax risk management is well understood within all parts of the bank.
  4. »Ê¹ÚÌåÓýapp bank’s policy and process for tax risk management is applied in practice by all parts of the bank.
  5. »Ê¹ÚÌåÓýapp bank’s policy and process for tax risk management covers all tax sensitive transactions which generate a UK tax advantage for the bank or its customers including transactions undertaken or promoted by overseas subsidiaries.
  6. »Ê¹ÚÌåÓýapp bank’s policy and process for tax risk management applies to all heads of tax â€� CT, PAYE & NIC, VAT, Stamps and more.
  7. »Ê¹ÚÌåÓýapp bank’s attitude towards the openness, transparency and professionalism of its relationship with HMRC reflects the commitments made under the relationship part of the Code.

HMRC would have concerns where a bank fell into any one of the examples below.

Examples of where governance arrangements may give cause for concern
  1. »Ê¹ÚÌåÓýappre are weaknesses in the bank’s tax risk management framework (e.g. there is no policy reflecting the tax planning part of the Code).
  2. »Ê¹ÚÌåÓýapp bank’s policy is not clear because it does not directly reflect the commitments made under the Code and there is no documented process in place for considering the tax implications of major transactions and tax sensitive transactions.
  3. HMRC has concerns over whether the bank’s tax strategy for tax risk management is understood and operated within the bank regarding major transactions and transactions that may need to be referred to HMRC under the Code.
  4. HMRC has concerns over whether the bank is fully committed to the undertakings in its strategy.
  5. HMRC has concerns over whether the bank has an adequate policy in place.
  6. HMRC has concerns over whether the policy has been implemented fully with a comprehensive process
  7. »Ê¹ÚÌåÓýapp bank’s policy and process for tax risk management does not apply to all heads of tax or the process has not been implemented.
  8. HMRC has concerns over the bank’s attitude towards the openness, transparency and professionalism of its relationship with HMRC.

See BKM507700 for an example of concerns over poor Code governance.