International corporation tax: a review of HMRC’s relationship with customers and their advisors

London, 3^rd August 2009

In a recently published review HMRC explore feedback from multinational companies and their advisors looking at issues that need to be addressed in respect of its handling of international corporation tax issues.

Background

The review was commissioned to look at customer and stakeholder views on HMRC’s handling of international corporation tax issues. HMRC have twin objectives: closing the tax gap (ensuring that the right amount of tax is paid under the law) and improving both the customer environment and the UK business environment.

Key Themes

A number of themes emerged from the feedback:

• The importance of the speedy resolution of issues
• Greater certainty is required
• Improvement of commercial understanding
• The desire for a joined up approach across HMRC

The feedback also suggests that HMRC has been travelling in the right direction following the 2006 Review of Links with Large Business but there is more work to do, particularly in the context of international corporation tax.

A Balanced Approach

The challenge for HMRC with international tax work is to balance its twin objectives detailed above. This can be difficult for a number of reasons:

• The stakes are high with amounts of tax involved regularly running into the £hundred millions
• Issues are technically complex. For example, transfer pricing requires a high level of commercial understanding across numerous industries and involves an application of economic principles.
• International tax issues can take years to resolve given this complexity

Meeting the Challenges

To meet these challenges it is essential for HMRC to forge a constructive relationship with its large business customers and their advisors. This relationship needs to be forged out of deeper understanding on all sides along with greater transparency and objectivity.

Rob Stephenson of Maven Partners has previously worked with HMRC to add commercial tax talent to the Anti Avoidance Group. Relationship building is at the heart of all our activities.

Rob Stephenson is a Managing Partner at Maven Partners, a specialist tax recruitment business.

robstephenson@mavenpartners.co.uk

+44 (0)207 061 6421