Responding to the draft Finance Bill 2022 legislation on notification of uncertain tax treatment by large businesses (from 1 April 2022), the CIOT makes a number of observations, including:
the legislation is not necessary – and compliance could be achieved through other means (and the measures themselves will also likely have a high compliance burden and result in uncertainty);
the reduction in the number of triggers to three (from seven) is welcomed;
the deadline for notification of uncertain tax treatment should match that for the corporation tax return;
difficulties could arise where a tax treatment becomes uncertain as a result of a change of circumstances after the return has been filed;
concerns remain around what a tribunal or court might find to be incorrect (third trigger), and the difficulties in applying the ‘substantial possibility’ tests;
HMRC has not yet provided sufficient detail on how businesses that do not have a customer compliance manager will be treated to ensure parity with those that do; and
clarity is needed on how this measure will interact with HMRC’s discovery powers and statutory reviews of penalties.
Responding to the draft Finance Bill 2022 legislation on notification of uncertain tax treatment by large businesses (from 1 April 2022), the CIOT makes a number of observations, including:
the legislation is not necessary – and compliance could be achieved through other means (and the measures themselves will also likely have a high compliance burden and result in uncertainty);
the reduction in the number of triggers to three (from seven) is welcomed;
the deadline for notification of uncertain tax treatment should match that for the corporation tax return;
difficulties could arise where a tax treatment becomes uncertain as a result of a change of circumstances after the return has been filed;
concerns remain around what a tribunal or court might find to be incorrect (third trigger), and the difficulties in applying the ‘substantial possibility’ tests;
HMRC has not yet provided sufficient detail on how businesses that do not have a customer compliance manager will be treated to ensure parity with those that do; and
clarity is needed on how this measure will interact with HMRC’s discovery powers and statutory reviews of penalties.
