Understanding tax strategy publication requirements is essential for large UK businesses.

If your company meets specific financial thresholds, compliance with HMRC regulations is mandatory. Failure to do so can result in significant penalties.

This article outlines who must publish a tax strategy, what it should include, and the consequences of non-compliance.

Who must publish a tax strategy?

UK companies, groups, and partnerships are required to publish a tax strategy if they meet at least one of the following criteria in the previous financial year:

  • Turnover exceeding £200 million
  • Balance sheet assets over £2 billion

Additionally, companies that are part of a Multi-National Enterprise (MNE) group with a global turnover above €750 million must also comply. These thresholds are mutually exclusive, meaning a UK entity that surpasses £200 million turnover does not need to publish a strategy if its global group turnover is below €750 million.

If a UK company is part of a larger group, it only needs to publish a tax strategy if it is not already covered by a higher-level published strategy. Foreign groups with UK subsidiaries or branches may need to publish separate tax strategies, depending on their corporate structure.

What should the tax strategy include?

A tax strategy must align with the company’s overall business operations and be approved by the Board of Directors. It should cover the following key areas:

  • How the business manages UK tax risks, including governance frameworks, internal controls, and Board oversight.
  • The company’s approach to tax planning, including whether it follows any tax codes of conduct and how external advice is sought.
  • The level of risk the business is willing to accept in relation to UK taxation.
  • The company’s approach to working with HMRC, including transparency and compliance measures.

While the strategy must be comprehensive, it does not need to disclose specific tax amounts paid or commercially sensitive information.

Where and when to publish the strategy?

A company’s tax strategy must be published online and made freely accessible. If the company does not have a website, the strategy may be hosted on the parent company’s website or another agreed platform.

The strategy must be published for each financial year beginning after 15 September 2016.

The first strategy must be published before the end of the financial year following the year in which the business first met the qualifying conditions.

Future strategies must be updated annually or within 15 months of the last publication, whichever comes first.

If a business no longer meets the qualifying conditions, it is not required to publish a new strategy, but the most recent one must remain publicly accessible for at least one year.

Penalties for non-compliance

Failing to publish a tax strategy or publishing an incomplete one can lead to significant financial penalties. HMRC will initially issue a non-statutory warning notice, giving 30 days to comply. If the business fails to act, penalties apply as follows:

  • £7,500 for failing to publish
  • A further £7,500 if the strategy is not published within six months
  • An additional £7,500 for every subsequent month of non-compliance

HMRC has up to six years to assess and impose penalties for non-compliance. Businesses can appeal a penalty in writing within 30 days of issuance.

Ensuring compliance

To avoid penalties, businesses should review their financial standing annually to determine if they meet the publication thresholds. Ensuring the tax strategy is comprehensive, up-to-date, and easily accessible online is crucial.

For expert advice on tax strategy compliance, Williamson & Croft is here to assist.

How we can help

As experienced tax advisers, we can assist you in preparing and publishing a fully compliant tax strategy tailored to your business. Our expertise ensures that your strategy not only meets HMRC requirements but also aligns with your corporate governance and wider commercial objectives.

We can provide a comprehensive review of your tax risk management framework, helping you identify potential exposure areas and implement appropriate governance structures.

We will work closely with your finance and tax teams to draft a strategy that accurately reflects your business’s approach to tax planning and risk management.

Our services include advising on best practices for maintaining transparency with HMRC, ensuring compliance with international tax regulations, and supporting any necessary updates to your strategy. Should you require external benchmarking or a review of industry standards, we can provide insights to ensure your tax strategy is both competitive and compliant.

Contact us today to ensure your tax strategy is aligned with best practices and published on time.