Global Daily Tax News, UK Updates Guidance On MNE Tax Strategy Report Requirement, (Aug 5, 2024)

HM Revenue and Customs has issued an update to its guidance on the requirement on large businesses to prepare and publish a tax strategy.

A tax strategy must be published by UK groups, sub-groups, companies, or partnerships if they had a turnover above GBP200m, or they had a balance sheet over GBP2bn, or both.

Alternatively, a tax strategy must also be published by UK companies or groups that are part of an MNE group that meets the OECD country-by-country reporting threshold of global turnover of EUR750m or more.

The two tests are mutually exclusive. If a UK company is part of an MNE, it does not need to publish a strategy if its global turnover is less than EUR750m, even if it personally exceeds the GBP200m turnover threshold.

A company or sub-group only has to publish its own tax strategy if it's not covered by a published strategy at a higher level.

The guidance includes comprehensive guidance on the definition of key terms for purposes of establishing whether the tax strategy report publication obligation applies.

In the first update in more than six years, HMRC has said the guidance on preparing a tax strategy has been updated on who must publish a strategy, what must be in the strategy, and when future strategies must be published.