HMRC launched its ‘Growth Support Service’ on Wednesday, expanding the hands-on support enjoyed by multinationals to encompass medium-sized businesses.
This new HMRC initiative is only open to businesses with an annual turnover of at least £10m, or who have at least 20 employees.
An HMRC spokesperson confirmed to AccountingWEB that businesses need only satisfy either of the minimum criteria, so your clients may qualify on the basis of employee numbers alone. The tax authority also clarified that the employee measurement is based solely on headcount, meaning that part-time workers count towards satisfying the requirement.
What is the Growth Support Service, exactly?
At first glance, the service looks like a streamlined or ‘lite’ version of HMRC’s existing large business guidance. Indeed, HMRC’s direct relationship with corporates has been a sore spot in the past, with the tax authority accused of favouritism towards big business.
Upon closer inspection, you’ll notice the Growth Support Service is split into two streams. On the simpler side, a newly formed “mid-size business customer engagement team” will act as a catch-all to help any qualifying businesses with complex tax questions.
Beyond that, mid-size businesses experiencing “certain types of growth” will unlock more direct attention.
In particular, growing medium-sized firms will have a dedicated tax specialist appointed to them. This individual will help with understanding tax issues and reporting, governance risks, access to incentives and reliefs and will also act as a gatekeeper to other HMRC specialists.
“Certain types of growth” is a rather broad category, it seems. HMRC defines the following relevant types of growth that would qualify a business for its direct support:
- Significant increase in turnover: “Turnover increased by 20% or more in the last 12 months, where this increase is at least £1m.”
- Growth related mergers and acquisitions: “Combining with, or buying, companies or other business organisations, or their operating units, resulting in growth of the business.”
- Group reorganisation: “Reordering or changing the composition of a group of companies for the purpose of business growth [excludes insolvency].”
- Stock market listing
- Significant introduction of capital: “...increases the balance sheet total by more than 20% where that capital is at least £1m.”
- Notifying HMRC and submitting Senior Accounting Officer (SAO) certificate for the first time
- Making quarterly instalment payments for the first time
- Entering the VAT Payments on Account (POA) regime
- Exporting goods or services for the first time, or establishing a presence in a new territory
HMRC also lists “Other significant business growth”, saying it would consider companies for the service that are growing in meaningful way beyond its pre-defined parameters.
The tax authority’s focus on growth and growing businesses would seem to come directly from the top. The government has openly expressed its desire to make growth a simpler goal for British companies.
What do you make of HMRC’s new service? Tell us below.
About Francois Badenhorst
I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter.