There are a small number of employers who engage in aggressive tax planning and/or who refuse to engage with HMRC in an open and collaborative manner. The Government are, to combat this, introducing Special Measures to impact on this small group of employers.
Those businesses with an ongoing history of aggressive tax planning and/or refusing to engage with HMRC will be advised that they may be at risk of being put into special measures.
A 12 month improvement period allows HMRC and the business to work together to resolve issues. At the end of the period, the business will either have improved and so not enter special measures or be notified of entry into special measures. At this stage no sanctions are triggered.
Businesses who enter special measures risk sanctions if they demonstrate further instances of the behaviours that led to their inclusion in special measures. Sanctions could include removing access to non-statutory clearances, removing the defence of ‘reasonable care’ or potentially naming as being subject to special measures.
Businesses enter special measures for a minimum of two years. Two years from entry into special measures HMRC will conduct an ‘exit review’ to decide whether the behaviours have improved and the business should exit special measures or whether an extension of special measures is required.
The Government have produced guidance which details:
what the special measures are the triggers relating to special measures the notices and process the sanctions the exit process About special measuresFull details of the guidance is available here.
