Skip to content
Solved

TCRM2451 | Managing our relationship with large business customers: Working with Low Risk customers: HMRC-initiated activity: Introduction: Mandatory work

From HM Revenue & Customs · Tax Compliance Risk Management

Mandatory work is work that must be carried out regardless of a customer’s risk profile, often in a specific manner. It results from, for example:

  • a legal requirement of HMRC

  • a legal requirement of the European Union

  • an agreement with another Government Agency

  • a commitment to the National Audit Office and/or the Public Accounts Committee

Some of this work may be commissioned from other parts of HMRC.

By definition, we have no option but to carry out mandatory activity, but there may be some scope for us to use our knowledge of the customer to simplify the work done and to minimise the burden on the customer. Examples of mandatory work are set out in the table below (note that this list is not exhaustive).

Examples of mandatory work

1. Corporation Tax (CT) mandatory work

  • Requests for information under Double Taxation Treaties

Requirements of Other Directorates

  • Underlying tax rate

  • Shares valuation

  • Property valuation

  • Renegotiation of cross-sector framework agreements and memoranda of understanding

2. Customs & International Trade (CIT) mandatory work

  • Common Agricultural Policy examinations

  • Mutual Assistance / EU verifications

  • Registration / Approvals / Authorisations

  • Import / Export Licensing

  • Authorised Economic Operator (AEO)

  • Community / Common Transit

  • Relief Scheme return verification

  • Customs Warehousing

  • Customs Freight Simplified Procedures (CFSP)

  • Customs Procedures with Economic Impact (CPEI): for example, End Use / Customs Warehousing / Outward Processing Relief (OPR) / Inward Processing Relief (IPR) / Temporary Admissions (TA)

Requirements of Other Directorates

  • References and Verifications Assurance

3. Employer Compliance (EC) mandatory work

  • Statutory Sick Pay

  • Statutory Maternity/Paternity/Adoption Pay

  • National Minimum Wage

  • Student Loans

Requirements of Other Directorates

  • Review of deductions PAYE / NIC

  • PAYE Settlement Agreement (PSA)

4. Excise and Environmental Taxes mandatory work

  • Mutual Assistance / EU verifications

Requirements of Other Directorates

  • References and Verifications

  • Betting and Gaming

  • Implementation of Alcohol & Drinks Regulations

  • Holding & Movement Irregularities

  • Registration / Authorisation / Approval checks

5. Petroleum Revenue Tax mandatory work

  • Calculation of Statutory Oil Values

Requirements of Other Directorates

  • None

6. VAT and Insurance Premium Tax mandatory work

  • Mutual Assistance / EU verifications

Requirements of Other Directorates

  • VAT pre- and post- repayment credibility checks

  • Registration / Authorisation / Approval checks

  • References and Verifications

7. Chargeable Events mandatory work

  • Systems audit of chargeable event certificate preparation by / for insurers

Requirements of Other Directorates

  • Undertaken by CAR(Audit) for CT&VAT to confirm integrity of tax certificates given to policy holders

VAT Pre-repayment Credibility Queries which are generated centrally by VAT Central Unit (VCU) are not mandatory. We must reach a decision, in the context of our knowledge of the customer and our relationship with them, as to the type of action required to discharge the query properly and effectively. Low Risk status does not preclude taking up a credibility query with a customer prior to repayment, especially if there are unusual circumstances and we have had no prior warning about the repayment claim from the customer.