The importance of being prepared for a HMRC Business Risk Review (BRR+)

Steve Haywood · Posted on: December 9th 2024 · read

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Once businesses or groups achieve a certain level of size and complexity – broadly, over £200m UK turnover - they will be dealt with by HMRC’s Large Business unit. This means they will get allocated a Customer Compliance Manager and be within the Senior Accounting Officer regime, but it also means they’ll become subject to HMRC’s Business Risk Review (BRR+) regime. Any business approaching this level, or who haven’t had a BRR+ meeting for a while and are due one would benefit from taking some time to get themselves prepared.


What is BRR+?

HMRC’s Business Risk Review process, or BRR+ for short, is a process where HMRC evaluate and discuss with the business where they think they sit on the compliance spectrum and whether they meet the criteria for low risk. They will look at all of the different taxes the company pays including corporation tax, VAT and employment taxes, and will look at the company’s behaviour in terms of systems and delivery, internal governance and the approach to tax compliance. Usually this will involve a request for information & documentation, as well as face to face meetings.

HMRC will rate the different areas, and conclude with an overall risk rating, which can either be low risk, moderate risk, moderate-high risk or high risk. If a business achieves a low risk rating, then HMRC will not normally undertake a further BRR+ review for another 3 years, whereas if a business is not low risk then they can expect annual reviews until they are low risk, along with additional scrutiny of their tax affairs, which increases the compliance burden leading to increased time and costs.


A new approach

Particularly for growing businesses that are coming into this regime for the first time, the focus on tax governance and risk management can feel very new and unfamiliar, which is why preparing early is really important, so you’ve already thought about these areas, and not coming to them for the first time when HMRC start their review. This will give you time to put in place tax governance and risk management procedures that HMRC expect, and remedy any deficiencies found. It will also highlight any other areas that require looking at, for example having undertaken a Corporate Criminal Offences risk assessment and having appropriate procedures in place, which is a pre-requisite for a low risk rating.

Preparing early and considering your tax governance and risk management processes ahead of a BRR+ review brings other benefits too, as it ensures that you are more robustly managing your tax obligations, and giving directors and other stakeholders greater confidence in the tax operations of the business.

MHA have a Tax Governance & Risk Management team with lots of experience of advising on BRR+ and helping businesses get ready for HMRC meetings. If you would like to discuss how we can help your business, then do get in touch.

Contact us For more information Contact the team
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