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FRC comments on the HMRC consultation on Improving Large Business Tax Compliance

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16 Oct 2015

The Financial Reporting Council (FRC) has issued its comment letter on the HM Revenue & Customs (HMRC) consultation entitled 'Improving Large Business Tax Compliance'.

Amongst other measures, the consultation proposes that large businesses should publish their tax strategy annually. It seeks views on the right medium for publication of this information, in particular whether it should be included in the annual report and accounts and also on the size of company that would be required to comply with the requirements.

The FRC “welcomes the broad approach” to reporting set out in the consultation and encourages HMRC to “develop reporting principles, alongside some key content elements” to avoid boiler plate disclosures.  The FRC does not believe that the disclosures should be included within the annual report and recommend that they are given in a separate report and/or published on a website.

Additionally the FRC:

  • expresses “significant concerns” about the proposal that there should be a named individual at “Executive Board” level with accountability for a business’s published tax strategy;
  • urges HMRC to follow a consistent approach to that of the European Commission (who are consulting on tax transparency, including disclosure of tax management policies); and
  • comments that information required under the general requirement to disclose a company’s internal governance and risk management would “lead to duplication of the information already disclosed in accordance with the UK Corporate Governance Code and Strategic Report Regulations”. 

The full comment letter is available on the FRC website.

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