Uncertain tax treatment policy review
13 January 2023
HM Revenue and Customs (HMRC) recently implemented a policy where large businesses are required to report where uncertain tax treatments are used.
HMRC must be notified if the tax advantage is over a threshold of £5 million. This may sound like a lot, but for a lot of businesses payroll can be the largest cost and this policy includes pay as you earn (PAYE).
A tax treatment is considered uncertain if:
- a provision has been made in the accounts for the uncertainty
- the tax treatment applied is not in accordance with HMRC’s known position.
It has now been announced that a review into the policy to assess that it is achieving the stated aims, as well as if the process is proportionate. However, as the notification process is an annual process, the evaluation will need to occur over multiple reporting cycles to gather full evidence.
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