HMRC’s recently published guidance states that the new uncertain tax treatment (UTT) legislation is intended to help reduce the legal interpretation portion of the tax gap – that is cases where HMRC and the taxpayer adopt differing views of the meaning of the relevant tax law – by promoting early identification and disclosure to HMRC of tax uncertainties.
The UTT legislation in FA 2022 Sch 17 has changed substantially from what was initially proposed; there are now only two notification triggers a significant reduction to the originally proposed seven. Broadly the first notification trigger applies where a provision has been recognised in the accounts to reflect that a different tax treatment may apply to a transaction (the ‘accounting provision trigger’) and the second notification trigger applies where reliance is placed on an interpretation or application of the law that is different to HMRC’s known interpretation or application (the...
