HMRC has published a consultation – closing 1 June – on the government’s new policy to require large businesses to notify HMRC where they have adopted an uncertain tax treatment.

The proposal is designed to improve HM Revenue and Customs’ ability to identify issues where businesses have taken an uncertain tax treatment in a return.

This requirement will help to identify and reduce tax losses caused by delays in identifying and resolving disagreements in how the law should be interpreted. This proposal is not intended to suggest that HMRC’s interpretation is always correct or that a difference in legal interpretation is avoidance or evasion.

This is the second consultation on this proposal and builds on responses to the previous consultation, which ran from 19 March to 27 August 2020. Particularly, HMRC is seeking views on:

• the definition of uncertain tax treatment
• the threshold for notification
• exclusions from the requirement to notify
• the proposed penalty for non-compliance

The notification requirement is due to come into effect from April 2022.