Large businesses must notify HMRC when they adopt “uncertain tax treatment” from 1 April 2022

HMRC are introducing a new notification scheme to attempt to reduce the tax gap.

A large business is defined as one with annual turnover exceeding £ 200 million or a Balance Sheet total over £ 2 billion.

The tax advantage must be greater than £ 5 million.

Applies to returns filed on or after 1 April 2022.

Applies to Corporation Tax, VAT and Income Tax (on partnerships and PAYE).

Uncertain tax treatment is when there is a substantial possibility that the treatment adopted could be incorrect or when the treatment is contrary to that generally accepted or applied.

A penalty for failure to notify starts at £ 5,000 and rises for repeated failures.

If the treatment has been notified to HMRC under another disclosure scheme (such as Tax- Avoidance), it does not need to be notified again.

For more information on this topic, or if you require any advice please get in contact with a member of the VAT and Customs Duty team.