Guidance: Check if you need to notify HMRC about an uncertain tax treatment

You have an uncertain tax treatment if either you:

• make a provision for tax uncertainty in your accounts
• do not follow HMRC’s known position

Check if you need to notify us

You must notify us if you have an uncertain tax treatment which has a tax advantage of more than £5 million for each relevant period and either your UK:

• turnover is over £200 million in a financial year
• balance sheet total is over £2 billion in a financial year

What are the relevant periods for each tax

The relevant return will be one of the following:

• Corporation Tax return
• PAYE return
• Partnership return
• VAT return

The relevant period is the financial year which the relevant return relates to for:

• Corporation Tax
• Income Tax (partnership self-assessment return)

The relevant period for VAT and PAYE returns ends on the last day of the last return period falling wholly within the related financial year.

How to work out the tax advantage

The tax advantage is the amount:

• gained by using the uncertain tax treatment compared to following HMRC’s known position
• of the provision for tax uncertainty which has been made in your accounts

If you’re in a partnership, the tax advantage includes the combined advantage the partners get as a result of any uncertainties in the partnership return.

The £5 million tax advantage threshold applies separately to each uncertain amount for the relevant period and relevant tax.

Specific rules that apply to Corporation Tax

Any amount deemed to be Corporation Tax should be included in your calculations, for example:

• Corporate Interest Restriction
• Tonnage Tax
• research and development expenditure credits

For the purposes of uncertain tax treatment, Corporation Tax does not include:

• banking surcharge
• bank levy
• any amounts from controlled foreign companies

When you do not need to notify us

You do not need to tell us about an uncertain tax treatment if your business is:

• an open ended investment company
• a collective investment scheme
• a unit trust
• an alternative investment fund
• a public authority — subsidiaries of a public authority are not exempt
• a qualifying asset holding company that owns more than half of another business that it holds as a market value investment

How to get an exemption

You can get a general exemption for an uncertain amount if we already have a substantial amount of information about the tax treatment which would have been included in a notification.

We may already have this information due to:

• another regulatory requirement, such as:
  • disclosure of avoidance schemes
  • international movement of capital
  • international tax enforcement
• other dealings with HMRC

What you’ll need to get an exemption

To get an exemption or to notify us, you’ll need to provide the following details including the:

• company or partnership details (including tax references)
• tax which is affected, such as:
  • VAT
  • Corporation Tax
  • Income Tax
  • PAYE
• financial year and tax year references
• details of why the business must notify us of uncertain tax treatment
• calculation of the tax advantage

To get an exemption, you can discuss the uncertainty with us.

If you’re a large business who falls under HMRC’s:

You must explain that the discussion is to get an exemption. You should make sure any details and amounts are clear. HMRC will confirm when you have a general exemption.

Before you notify us

You must have worked out the amount of tax uncertainty or provision in your accounts.

What you’ll need to complete the online form

To complete the online form you’ll need the following details:

• how much tax the uncertainty relates to — for PAYE, also include the National Insurance Contributions in the overall amount
• the date range affected — for example, for VAT uncertainties, the start date of the first return and end date of the last return in the affected date range
• the reason why you need to notify HMRC
• information about the reason for the uncertainty
• any statute, case law or HMRC known position which is not being followed

You should keep records to support the information you give us when you complete the online form.

How to notify us

If you need to notify us of uncertain tax treatment and you do not have an exemption you must use the online form.

Start now

Read the uncertain tax treatment notice which has the force of law.