Large Business Notification Requirement of Uncertain Tax Positions

HMRC have introduced new legislation on Uncertain Tax Treatments (UTT) for large businesses. The legislation is now in force, with effect from 1 April 2022.   

Certain large companies and partnerships are required to notify HMRC of uncertain tax treatments which are included in the relevant return submitted to HMRC on or after 1 April 2022. Relevant returns include corporate tax, VAT and income tax returns (including self assessment and PAYE returns) and notifications will be required where there is uncertainty surrounding the following criteria: 

1. Provisions made in the accounts; or 
2. HMRC’s known interpretation of the law.

Large companies are generally those with a UK turnover exceeding £200m and a UK balance sheet of £2bn and includes UK companies, partnerships, limited liability partnerships, UK branches and UK permanent establishments. 

There are exemptions available and a de minimis limit of £5m which reduce the compliance obligation. However, penalties will apply for late notifications, for incomplete or inaccurate notifications or for non-submission of a notification. The penalties start at £5,000 and increase up to £50,000. 

If you have any queries or want to discuss how this may impact on your business, please get in touch with Alan Campbell, Partner and Head of Corporate Tax, or your usual AAB contact.

Find out more about AAB’s International Tax team.