TCRM2100 - Managing our relationship with large business customers: Definitions

• Co-operative compliance - the term has been developed by the OECD to describe the process where tax authorities look to effectively manage risk with large and complex customers. OECD is clear that “co-operative compliance approach is based on co-operation but with the purpose of assuring compliance, which is to say payment of the right amount of tax at the right time.”
• Tax compliance risk - this is a risk which, if it transpires, results in the incorrect tax being paid to, or reclaimed from, the Exchequer.
• Tax Compliance Risk Management Process - the process by which we work with individual large business customers to identify and mitigate their tax compliance risk. This process includes the Business Risk Review (BRR+), Risk Assessment, Risk Working and monitoring customers’ business performance and developments.
• Business Risk Review (BRR+) - the process by which HMRC evaluates and discusses with the customer where they sit on the compliance spectrum and whether they are Low Risk, Moderate Risk, Moderate - High Risk or High Risk.
• Risk Assessment - the process whereby particular sources of information e.g. tax returns are reviewed by HMRC to establish whether there is a specific tax compliance risk.
• Risk Working - activity HMRC undertakes to address specific significant tax risks.
• Low Risk customer - a customer who has an open and transparent relationship with HMRC, effectively manages their own tax compliance risk and who we trust will not engage in tax planning which HMRC believes does not support genuine commercial activity.