From 2017, two types of UK company are required to publish their tax strategy online. The first is where UK turnover exceeds £200 million or UK assets exceed £2 billion (either in a single company or across the group to which the company belongs). These companies are also included in the Senior Accounting Officer regime (see the blog post here). In the case of a group or sub-group of companies it is the UK parent or sub-holding company that has the responsibility to publish the strategy so in most cases subsidiaries need take no further action.
UK companies must also publish their tax strategy online if they are a member of a multinational group with global income of €750 million. This can be more problematic as there may not be a UK sub-holding company to take responsibility for this, so even a small UK member of a much larger overseas group can end up having to publish its strategy online.
The strategy must cover specified areas, including what levels of tax risk are considered acceptable, how these are managed and attitudes to tax planning. The initial strategy should have been published in the first accounting period beginning on or after 15 September 2016 and it needs to be refreshed annually, no more than 15 months after the previous publication. It is important that the strategy is readily available so it cannot be password protected, behind a paywall or on a members’ only area of the website.
Significant non-compliance penalties can be charged to the company if it fails to publish its strategy. These increase over time so if you have missed publishing your first strategy it’s important to catch up as soon as possible.
Also, if the company is a member of a multinational group it must be included in Country By Country reporting (for more information see this link).
If you have any questions about your company’s tax strategy, please contact Ensors corporate tax team.