Risk bands are too narrow

HMRC has responded to the consultation on the process for risk profiling large enterprises in particular the business risk review.

It conducts a periodic review of each large business placing them into one of two categories – low risk or non-low risk. This assessment is a key factor in how closely the department scrutinises the business.

In the consultation response HMRC accepts:

• there should be more risk categories to reflect differences across the large business population;
• the process should take more account of the tax risk management already carried out by large businesses such as the senior accounting officer provisions and the publication of tax strategies;
• the process should encourage continuous dialogue between HMRC and the taxpayer on reducing tax risk. A set of actions and timelines should be updated regularly and discussed between...