Business Risk Review+ (BRR+)

Gaining insight into the Business Risk Review+ (BRR+), a business risk assessment, to enhance business risk management and resilience in your organisation.

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The BRR+ is the process used by HMRC to review the business risk control level of an organisation from a tax perspective. It was introduced in 2019 to help influence taxpayer behaviour and ensure risk profiles are reflected accurately, which in turn governs the level of review and intervention from HMRC. 

There are four risk categories:

  • Icon Core Checking Neg Bkg

    Low

  • Icon Core Checking Neg Bkg

    Moderate

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    Moderate-high

  • Icon Core Checking Neg Bkg

    High

Business Risk Reviews are undertaken by a business’ Customer Compliance Manager (“CCM”) at HMRC. CCM's are allocated to large businesses (those who generate more than £200m of UK turnover and/or £2bn gross assets) and act as the business’ designated contact at HMRC.

During the BRR+ review, HMRC looks at 24 low-risk indicators that reflect the robustness and business risk management of a company's tax governance, frameworks, procedures, guidelines, oversight and risk handling strategies across the following three areas:

  • Systems and delivery 
  • Internal governance 
  • Approach to tax compliance 

Benefits of a proactive approach to the BRR+

  • A large part of the BRR+ process is HMRC’s questionnaire and information request and this can be time consuming for a business to pull together responses and documentation.  Early preparation and establishing best practice will give the business time to have all the relevant documentary evidence available
  • The BRR+ process is designed to be a collaborative process. A business should use this as an opportunity to improve its relationship with HMRC, hold open discussions around any issues the business is facing and take on board HMRC’s comments.
  • Early preparation can increase the likelihood of achieving a low-risk rating which can reduce the level of intervention by HMRC and result in less frequent reviews
  • A proactive approach to BRR+ readiness means the business is more likely to drive interactions with HMRC, rather than the other way round

How Evelyn Partners can work with you on your BRR+

We have supported many businesses with preparing for a BRR+ and can provide assurance for your business in line with your peers and best practice. We generally provide support in three stages:

  • Phase 1 – Tax health-check across all taxes, along with preparation of an action plan
  • Phase 2 – Addressing key areas and meeting preparation
  • Phase 3 – Support throughout the BRR+ process including:
    • Advice on conducting the review
    • Review of the agenda and information request prepared by HMRC
    • Input into the BRR+/ review proposed slides for the meeting

For businesses that have already performed a BRR+, we can support with carrying out a refresh, which involves reviewing the business’ risk control and tax risk to reflect any business changes and reviewing existing policies and procedures to identify any required changes.

If you have any questions or would like to discuss the BRR+ or how we can support on tax risk and governance more generally, please contact Janaissa Eaglestone.

FAQs

What criteria do HMRC review the businesses on for BRR+?

During the BRR+ review, HMRC looks at 24 low-risk indicators across three areas:

  1. Systems and delivery is about assessing the customers’ ability to deliver the right tax at the right time. Examples of low-risk indicators include:
    • All returns and payments are made on time
    • The customer maintains a tax risk and controls matrix and shares this on request from HMRC
  2. Internal governance is about assessing the customers’ management accountabilities and processes for managing tax risk as well as their openness and co-operation with HMRC
    • The customer has clear accountabilities up to and including the Board for the management of tax compliance risk and tax planning
    • The customer appreciates its potential liability under the Corporate Criminal Offence legislation and steps have been taken to profile and manage the risk of failing to prevent the facilitation of tax evasion
  3. Approach to tax compliance is about assessing the customers’ tax strategy and relationship with HMRC. Examples of low-risk indicators include:
    • The customer maintains an open and transparent relationship with HMRC
    • The customer has a documented tax strategy that is used to steer all tax considerations

Should my business achieve a low-risk rating?

Most businesses aim to be classified as low-risk. This will naturally translate to less intervention from HMRC and less regular HMRC reviews (generally carried out on a 3–5 year cycle).

However, some businesses decide that a moderate risk rating is more in line with their business, given their complexity, and believe this gives them better communication with HMRC when they need it. A moderate risk rating can also get them more traction with the rest of the business in respect of tax. 

It is ultimately dependent on the business and we work with our clients to manage the risk and the process accordingly.

How often is a BRR+ carried out?

This is dependent on your business’s rating, however as a rule of thumb your organisation can expect to go through the BRR+ process every one to three years. A higher risk rating will result in more frequent reviews, with HMRC’s factsheet stating that this will usually be annually.