VAT News

Uncertain Tax Treatment (UTT) – New HMRC Regime for Larger Businesses


HMRC has an open consultation running at the moment on their plans for a new disclosure regime for larger businesses. The intention is for the regime to come into force from the 1 April 2022 and is there to encourage dialogue around tax areas where HMRC’s known position on the treatment would suggest some “uncertainity”. There’s a lot of detail in the draft guidance to consider for those drawn into this area and the link is here to have a read through.

Within the scope of this new disclosure regime and the taxes it covers (Corporation, Income and VAT) are both companies (wherever incorporated) and partnerships (wherever formed) that meet the threshold criteria which are :

  • a UK turnover above £200 million
  • UK balance sheet total over £2 billion

Where a company is a member of a group, its UK turnover and UK balance sheet totals should be aggregated with other 51% subsidiaries for the purposes of determining whether the large business is within scope.

Defining HMRC’s “known position”

One aspect noted was in the section that deals with how HMRC define what is seen as their “known position”. This includes commentary that excludes advice or information gathered via an HMRC Forum from being regarded as a point that could be relied upon by a tax payer. As HMRC increase the use of such Forums it does feel like the benefit of these could be undermined if what an HMRC representative says in such Forums can’t be taken as representing HMRC’s position on a point.


“An amount is notifiable under the second criterion if the tax treatment applied in arriving at the amount relies (wholly or in part) on an interpretation or application of the law that is not in accordance with the way in which it is known that HMRC will interpret or apply the law. (‘known position’).

As with the first criterion, for notification of the uncertain amount to be required, the entity must be in scope, the tax must be a relevant tax, the tax return must be relevant to UTT, the threshold condition must be met, and the exemptions must not apply (UTT13100).

The table below lists the types of publications that do/do not indicate HMRC’s known position for the purposes of this criterion:

Contains HMRC’s Known Position

Not to be considered

HMRC guidance, including HMRC’s published technical manuals and customer guidance published on GOV.UK

Advice provided via HMRC forums

Statements of Practice

Submissions HMRC makes in litigation

Public Notices


Explanatory and technical notes relating to legislation


Guidelines for Compliance


Revenue & Customs Briefs


Correspondence between the taxpayer and HMRC about transactions covering statutory and non-statutory clearances and other interactions with HMRC on specific transactions


The scale of bodies caught within this disclosure regime certainly limits the impact for the wider VAT community in the UK. However, we have seen its planned impact adversely ripple through to a smaller organisation who engaged with a large property vendor on the purchase of a site. The vendor was nervous on a disapplication treatment sought by our VAT sensitive client and insisted on HMRC clearance before accepting the disapplication. This we secured but all these clearances take time which may not be on your side in time sensitive transactions.

An aspect to watch out for, we would suggest, and if it does cause complications then do get in touch as usual.

For the avoidance of doubt, the content recorded in this news article does not constitute formal advice and we do not guarantee the accuracy of any information provided at the time of reading. It is always recommended that you seek professional advice before acting on any of the news articles or information included.

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