Taxpayers encouraged to ensure returns are correct and complete

HMRC has released updated Guidelines for Compliance (GfC13), outlining its expectations of taxpayers who may be considering applying novel or unlikely interpretations of tax law, or who are uncertain about how the law applies when preparing tax returns or related documents.

These guidelines are designed to clarify HMRC’s position on complex, widely misunderstood, or novel areas of the tax rules. While they are not legally binding, HMRC highlights that following them can help taxpayers submit accurate returns, minimise the risk of compliance checks, and avoid potential additional tax, interest, and penalties.

Importantly, HMRC stresses that GfC13 represents its existing view and does not introduce any changes to the law or HMRC’s wider policy.

When to Use GfC13

According to HMRC, taxpayers should consider the guidance when:

• Applying a novel interpretation of the law – i.e., one that has not been considered by a court or tribunal. Taxpayers are expected to believe, based on advice, that the courts would be likely to accept this interpretation.

• Facing uncertainty, even after taking reasonable steps to resolve it.

• Considering an improbable interpretation – where the taxpayer believes courts or tribunals would be unlikely to agree. In such cases, HMRC advises against filing a return based on that position.

The guidelines also provide practical examples of situations involving legal uncertainty, finely balanced arguments, and novel or improbable positions.

Seeking Advice and Support

HMRC explains how taxpayers may seek assistance, including through applications for non-statutory clearance in certain situations.

Where uncertainty remains, HMRC strongly encourages seeking professional advice. Taxpayers are reminded of their responsibility to:

• Select a qualified and competent adviser.

• Provide all relevant and accurate information.

• Understand and critically assess the advice received, particularly where adopting novel or uncertain interpretations of the law.

Ultimately, HMRC emphasises that the responsibility for accuracy rests with the taxpayer, even if professional advice has been obtained.

Disclosing Unresolved Uncertainty

Where significant uncertainty cannot be resolved, or a novel interpretation has been applied, HMRC recommends taxpayers disclose the following information when submitting their return:

• Name and unique taxpayer reference (UTR).

• A description of the issue, the interpretation adopted, and the impact this has on the tax liability, credits, or losses declared.

This disclosure can be made in:

• The “white space” of an income tax self-assessment return.

• Supporting computations or attachments for corporation tax returns.

• Other appropriate sections for different taxes or duties, as set out in the guidelines.

Expectations for Tax Advisers

The guidelines also remind tax professionals of their obligations under HMRC’s Standard for Agents and, where relevant, the principles of Professional Conduct in Relation to Taxation (PCRT).

Further Information

For more detail, you can review the official HMRC guidance here:
👉 Guidelines for Compliance – GOV.UK

If you would like support in understanding these changes, or require assistance with bookkeeping and accounts, please contact The Hollies Bookkeeping, Shropshire:
📞 01743 790086
📧 info@holliesbookkeeping.co.uk
🌐 www.holliesbookkeeping.co.uk   

Photo by Giorgio Tomassetti on Unsplash                                .