Organisational culture and the attitude of senior members of the board are becoming more influential on tax strategy in large companies than the views of the heads of tax and wider tax team, according to research carried out by HMRC into corporations attitude to tax planning and the effective tax rate
The department conducted qualitative interviews with heads of tax, chief financial officers and others with strategic decision making roles in 35 large businesses, of which 13 were UK-owned and 22 foreign-owned.
The aim was to improve HMRC’s understanding of what issues persuade large multinationals to change their tax strategies and the factors and levers which prompt change.
The findings suggest that influence is shifting away from a business’s tax function and head of tax, towards the CEO and board.
Respondents described how culture and appetite for risk is set by the board in line with shareholder/ owner priorities, and is seen to be hugely influential for tax strategy. The research highlighted recent changes in the ‘tax climate’ as having an impact on company culture, driven by public, press and government scrutiny.
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