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New ‘Single Compliance Process’ being trialed for business taxpayers

On the 18th May 2011, HMRC announced it would be trialing a new ‘Single Compliance Process’ from June onwards, with a view to rolling out the process to the remainder of the UK from January 2012.

HMRC states “By simplifying and standardising the process for compliance checks HMRC will improve customer experience and reduce costs as the check will only take as long as the risks and behaviours encountered dictate.”

So what is the Single Compliance Process (SCP) and what does it mean for you?

As part of the Spending Review, HMRC claim one of their top priorities is to relieve the ‘compliance burden’ on business, whilst increasing the efficiency of their activities.

In a nutshell, when dealing with a compliance issue for many types of tax, HMRC will use a standard procedure for business tax payers in the SME sector. It is hoped this will improve the quality and consistency of their enquiry work by working more collaboratively with businesses and their agents, thus reducing delays and unnecessary use of resources.

HMRC state “the new process seeks to align our approach and to minimise the impact on the business by earlier contact and resolution and working multiple tax risks where necessary.”

What will the SCP aim to achieve?

  • Reduce business burden by reducing the time taken to complete enquiries
  • Reduce the cycle times of enquiries, in other words the time spent per case
  • Focus the intensity of the enquiry so that it is proportionate to the risks identified
  • Provide a flexible framework for our staff and business in which joint expectations are clear

Who does the SCP affect?

The SCP is aimed solely at business tax payers in the SME sector. The areas which are currently undergoing trials are Reading/Slough, Newcastle, Warrington, York, Exeter, London Euston and Southampton in England; Cardiff in Wales; Belfast and Edinburgh/Dundee.

How does the SCP differ from current compliance processes?

The SCP allows for the enquiry to be driven by the risks or behaviours identified and includes:

  • Building on the principles of Openness and Early Dialogue (OED) by informing the taxpayer and the agent at the first opportunity of the particular risks to be addressed to give time savings and clarity for both parties about the risks being addressed.
  • Developing a relationship with the agent/business for mutual understanding of the benefits of particular approaches and how these maintain the pace or speed up the process.
  • Collaboration between HMRC and agent/business at every stage in the enquiry and communicating any findings directly so that there should be “no surprises”.
  • Swifter record reviews carried out ‘on site’.
  • Only seeking the facts and evidence to address the particular risks identified and not using the enquiry to undertake a general “fishing expedition”, meaning that discussions are more focussed.
  • Sample record reviews as opposed to a full review when appropriate.
  • Working to Litigation and Settlement Strategy principles, importantly that HMRC will not generally enter into a dispute unless the revenue flows potentially involved justify doing so.

We have experience dealing with these kinds of HMRC visits already and it’s important that clients are well briefed and in the majority of cases you’ll find it advantageous if your accountant is present. For advise about how the SCP could affect your business or help preparing for a HMRC visit call our tax team today on 0845 680 7800.

 

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