IEIM750090 - Reasonable Procedures
There is no definitive list of what ‘reasonable procedures’ are. What is reasonable will depend on the circumstances. For example, a large organisation with lots of staff working on potentially reportable arrangements will likely need to have different procedures in place compared to a small business where far fewer staff are involved.
Procedures do not have to be new or specifically designed to ensure the regulations are complied with. It is perfectly acceptable in principle to leverage existing arrangements and procedures in place for other similar reporting requirements where those procedures are considered to be appropriate to help meet the requirements of the regulations.
Where a business believes it has procedures in place which should be taken into account in considering whether a penalty is due, it should provide evidence of those procedures, and why they are considered to be reasonable and appropriate in the circumstances, to HMRC or the FTT.
Businesses may wish to consider things such as training procedures for staff, escalation routes for potentially reportable arrangements, and governance around decisions on what is reportable. Businesses should also consider the practicalities of reporting, including who will be responsible for making the report, what training they may need, and what backup procedures they may need in case of staff absence or other issues.
In considering whether processes are reasonable, HMRC will have regard to all the circumstances, including in particular, the nature of the business, its size and scale of operations and the general profile of its activities, such as whether it has involvement in a lot of cross-border work.