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17 November 2006

Varney Review means Greater Tax Certainty for Business

The Chancellor today announced that he will implement in full the recommendations of the Review of Links with Large Business, published by HM Revenue and Customs (HMRC) today.  The Review, led by Sir David Varney, recommends HMRC provides big businesses with increased and quicker assurance on the tax treatment of their activities and business transactions.

Gordon Brown, Chancellor of the Exchequer, speaking at today’s Business Advisory Summit, said:

“This review sets out how we will continue to build a modern relationship between business and HMRC for tax administration - one that gives companies greater tax certainty, quicker decisions and fewer investigations.”

The Review of Links with Large Business, proposes a series of commitments for HMRC, to be introduced over a timeframe up to the end of 2007, designed to provide business with greater certainty about the tax treatment of transactions more quickly; more efficient resolution of tax issues; and a more cost effective approach to administering tax affairs based on an efficient risk-based audit approach.

Sir David Varney, Chairman of the Review, said:

“The Review sets out to address the concerns of business about the 1 nature of the relationship with HMRC.  I am confident that the  proposals put forward, while challenging, meet these concerns and will  fundamentally transform the relationship.”

The Review was conducted via a series of meetings between HMRC and leading figures from the UK business community, plus trade associations and representative bodies. 

Notes for editors

  2. The Review proposes a framework, based on culture change, consultation and dialogue and operational focus, within which business and HMRC can work together to improve the relationship.  The main proposals underpinning this framework are:

    a. An advanced rulings process for significant investment and corporate reconstruction projects, and an extension of existing clearance practices – giving UK and international business easier, earlier and speedier certainty about tax matters.
    b. A more transparent approach to risk assessment, informed by an understanding of how businesses identify and manage risk, to ensure that resources are focused on resolving contentious issues more efficiently and quickly – reducing time and costs spent by business working with HMRC.
    c. A requirement for HMRC to take the business perspective into account in everything it does – giving earlier clarity and reducing complexity and administrative burdens for business.
    d. A Large Business Advisory Board will be established to oversee delivery of the Review’s proposals and maintain an external challenge.

  3. Sir David Varney was appointed by the Chancellor as his senior adviser on the Transformational Government Strategy in the 2006 Budget and took up his appointment on 1 September 2006.  Prior to that, Sir David was Chairman of HMRC from September 2004.  Sir David has been Chairman of MM02, and was previously Chief Executive Officer of BG Group (formerly British Gas) from 1996 to 2000.
  4. Media enquiries should be addressed to the HM Revenue and Customs Press Office on  020 7147 2324 , or the Treasury Press office on 020 7270 5238.
  5. Non-media enquires should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558, or by e-mail to public.enquiries@hm-treasury.gov.uk
  6. This press release and other Treasury publication and information are available on the Treasury website at http://www.hm-treasury.gov.uk. If you would like Treasury press releases to be sent to you automatically by e mail you can subscribe to this service from the press release site on the website.

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