EVENT: Briefing for Corporate Members on Tax Strategy and Governance
Date: 18th November, 2016 Time: 01:00 pm - 02:30 pm
There have been significant changes in what the UK government now expects from large firms, both in terms of their tax strategies and their compliance with tax regulations. Furthermore, the government is planning to introduce a new corporate criminal offence of 'failing to prevent the facilitation of tax evasion'.
Anne-Frances Reid, a Director in PwC's Banking and Capital Markets Tax division, and Megan Cooper, a Manager in the Tax Reporting and Strategy Division, briefed ABA corporate members on the latest developments during an invitation-only lunch, held at the Association's offices on 18 November.
In March 2016, the UK Government's 2016 Finance Bill introduced a requirement for large businesses to publish a 'tax strategy' that has been approved by its Board of Directors. It also published a Framework for Co-operative Compliance which sets out the Government's expectations for how taxpayers should behave. Finally, it introduced a Special Measures Regime that is aimed at large businesses that persistently engage in agressive tax planning.
A few weeks later, the Government published guidance on what firms should include in their tax strategy and updated guidance on what good Senior Accounting Officer (SAO) compliance looks like.
The two PwC executives stressed that there are common themes running through all of the recent developments relating to the management of tax risk and formalisation of governance/strategy requirements. Taken as a whole, they said, the changes appear to raise the bar for tax risk management. In order to reduce the complexity of the new requirements, and minimise the time and costs of introducing overlapping frameworks and policies, firms should take a coordinated approach to tax compliance.
Attached below are (i) the slides that PwC presented at the lunch, (ii) a one page update from the tax authorities on the SAO regime ("What good looks like") and (iii) an OECD White Paper that sets out essential features of a tax control framework ("Building Better Tax Control Frameworks").
Guidance from the tax authorities on what they expect firms' tax strategy to cover can be seen here. In addition to these expectations, under the banking code, certain statements are expected to be within the tax strategy document, these can be found in Chapter 8 of this document.
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