On 27 October 2021, HMRC confirmed a new policy requiring large businesses to notify HMRC of uncertain tax treatments.
We assist large businesses to assess their VAT position. This sometimes results in positions which are supported by VAT legislation but where HMRC’s view is contrary, or where the other party to a transaction takes a different view, or where the technical area is itself highly uncertain. Usually businesses will seek to engage with HMRC in such uncertain positions, but there are occasions when this might not be appropriate such as after a Tribunal or court decision against HMRC. Businesses will now be required to report these positions to HMRC in material cases and we are assisting our clients to do so.
Reports will be required by law, but the basic details are as follows.
Date:
First tax return due to be filed on or after 1 April 2022
Taxes:
VAT, Corporation Tax and Income Tax returns (via Self-Assessment and including amounts collected via PAYE)
Parameters:
- Large business, being either:
- Turnover above £200 million per annum, or
- Balance sheet total over £2 billion
- Uncertain tax treatment, being either:
- Provision has been made in the accounts for the uncertainty, or
- The tax treatment applied is not in accordance with HMRC’s known position
- Over £5 million tax advantage
- Not already disclosed to HMRC
Other:
There will be penalties for failure to notify HMRC of any uncertain tax treatment within the above parameters. Final legislation is expected later in 2021 or early 2022.
If you have any queries or require further information, our team would be delighted to discuss. Please do get in touch.
