Large business tax strategies: too big to fail?

This feature article by Nick Skerrett, Martin Shah and Rebekka Sandwell for PLC Magazine considers the requirement for large businesses to publish a tax strategy one year on from the requirement becoming effective.

This article first appeared in the June 2018 issue of PLC Magazine who have agreed to Simmons & Simmons making it available on elexica.

HM Revenue & Customs (HMRC) noted in its July 2015 consultation that there were a small number of large businesses that continued to adopt highly aggressive behaviour, including tax avoidance and other tax. Following the consultation, the government introduced a requirement for large businesses to publish an annual tax strategy with penalties for non-compliance. HMRC intended the new requirement to address perceived bad behaviour and discourage other businesses from adopting a similar approach.

In the current climate, large businesses are certainly increasingly attuned to the potential reputational risks associated with their chosen tax policy, and this may incentivise them not only to be seen to comply with the requirement to publish a tax strategy, but to emphasise in that strategy their compliance and responsible approach to taxation. However, many of the tax strategies that have been published so far have contained generic comments which simply seek to meet statutory obligations, rather than including meaningful specific statements of policy that may invite further discussion.

This article looks at:

  • the scope of the requirement to publish a tax strategy, including which entities are required to publish, when, how and what they must publish, and the penalties for non-compliance
  • an examination of some of the tax strategies that have been published so far and the trends that are emerging, and
  • the strategic implications of tax strategies for large businesses.

The full article can be read here.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.