Greater public scrutiny of individual and corporate tax affairs means greater risks around your tax strategy and governance. Here are five ways to get up to speed in a tax-sensitive world.
Benjamin Franklin, one of the Founding Fathers of the United States said there were two things certain in this world, death and taxes. And right now tax is rarely out of the headlines and it's not going away.
For businesses that think the current scrutiny only applies to large multinationals, they need to think again. A mid-sized business (MSB) for example might escape the media spotlight and may not be directly affected by wider international initiatives (Base Erosion and Profit Shifting as an example) but they need to adopt similar approaches to their tax strategy and governance – and quickly.
Good tax strategy and governance shouldn’t be adopted just because the tax authority is checking – although our experience indicates this is happening more regularly to mid-sized businesses. It needs to be adopted because it's good business practice. Tax shouldn't drive behaviour but it needs to be considered, and considered early. The sooner you adopt good tax strategy and governance, the sooner it will embed into your processes and procedures, and the risk of being caught out reduces.
So what do you need to do to ensure you have good tax strategy and governance in place?
- Implement a tax strategy
- Maintain a tax risk register
- Benchmark your tax control framework
- Carry out a tax health check
- Maximise innovation reliefs