A practical guide UK corporate tax governance in 2025

In today’s regulatory environment, tax governance is more than just following the rules. It is now a key part of a company’s overall strategy. As HMRC increases its focus on how businesses manage tax, UK companies need to take a clear and proactive approach to identifying and handling tax risks.

This guide explores the key pillars of tax governance in the UK. It includes how to identify and manage tax risks, complete a tax risk register and the tax governance obligations you need to be aware of.

What is tax governance?

Tax governance means having clear policies, procedures, and controls that a company uses to manage its tax affairs responsibly and transparently. It helps ensure that tax decisions align with the company’s overall risk tolerance, ethical standards and legal obligations.

Effective tax governance aims to

• Promote accountability
• Reduce the risk of non-compliance
• Enhance stakeholder trust 

Identifying and managing tax risks

Tax risks can arise from various sources. These include changes in legislation, complex transactions or inadequate internal controls. To manage these risks, companies should:

• Conduct regular risk assessments to identify areas of potential exposure
• Implement internal controls and tax accounting systems that ensure accurate reporting
• Engage with external advisors for complex or uncertain tax matters
• Maintain documentation to support tax positions and decisions

A risk-based approach is essential. Companies should look at how tax risks could affect their finances, reputation, and day-to-day operations. Once these risks are understood, businesses can take steps to manage them. One useful way to do this is by using a tax risk register, which helps track and reduce risks across the organisation.

The tax risk register

A tax risk register is a dynamic internal document that helps companies systematically identify, assess and monitor tax risks across their operations. Typical components include:

• Risk description: Clear statement of the tax issue
• Risk owner: Responsible individual or team
• Likelihood and impact: Assessment of probability and consequences
• Mitigation actions: Steps to reduce the risk
• Status and review date: Ongoing monitoring and updates

Maintaining a tax risk register and using it as a tool to for senior leaders to improve processes and reduce risk. It also supports proactive risk management and provides documented evidence for HMRC reviews.

What obligations your business needs to be aware of?

All businesses should be aware of their obligations under the corporate criminal offences. Further detail on this regime is set out below.

Large businesses (broadly, those with over £200m turnover or a balance sheet total of over £2bn) have additional obligations, including:

• The senior accounting officer (SAO) regime
• Publishing a tax strategy
• Notifying uncertain tax treatments
• Business risk reviews carried out by HMRC

Corporate criminal offences (CCO)

The Corporate Criminal Offences (CCO) were introduced by the Criminal Finances Act 2017. These rules make companies legally responsible if they fail to stop their employees or others working with them from helping someone else commit tax evasion. For example, this could happen if an employee changes invoice details to help another business pay less tax than it should.

To comply with both acts, businesses must implement reasonable prevention procedures such as:

• Conducting thorough risk assessments to identify potential areas of vulnerability
• Having a clear policy on the facilitation of tax evasion and fraud
• Staff training
• Clear reporting channels for concerns

Failure to comply can result in unlimited fines and significant reputational damage.

What we recommend:

For all our clients, we can support you with the below key recommendations:

• Staff training on CCO with our bespoke e-learning
• A template tax risk register, and support in completing it, to help meet your SAO obligations along with dedicated training
• Support in creating a tax strategy document
• Assistance prior to and during the BRR+ process with HMRC to understand your risk rating.

How can we help

Tax governance is no longer optional. It is a critical part of corporate responsibility and risk management. By putting strong tax controls in place, encouraging a culture of compliance, and being open with HMRC, companies can avoid fines and build a stronger reputation. These steps also help improve how the business runs and how well it handles risks.

At PKF Francis Clark, we have decades of experience across our tax teams to facilitate a strong corporate tax governance. Our team also includes tax professionals that have worked for HMRC, who have direct experience in HMRC processes and approaches.