Impact assessment

Uncertain Tax Treatment (UTT) – screening equality impact assessment

Published 1 April 2022

Project objectives

This measure will require large businesses to notify HMRC where they have adopted an uncertain tax treatment that HMRC is not already been made aware of. Amounts of Corporation Tax, Value Added Tax (VAT) or Income Tax (via Self Assessment or PAYE) will be classified as uncertain if the tax treatment to which they relate meets one of two legislative criteria:

1. that a provision has been made in the accounts for the uncertainty
2. that the tax treatment applied is not in accordance with HMRC’s known position

Businesses will be required to notify HMRC only if the tax advantage exceeds a £5 million threshold.

This measure aims to highlight and resolve legal interpretation differences earlier, ideally by encouraging more businesses to follow best practice and discuss areas of uncertainty with HMRC before they submit their returns or, if necessary, through notification.

This equality impact assessment is related to the operational delivery of Uncertain Tax Treatment.

Customer groups affected

The customer groups affected by the scheme are:

• an estimated 2,320 businesses with a turnover above £200 million or with a balance sheet total of over £2 billion, or both

• third parties who deal with/manage tax affairs on behalf of the customers

What customers will need to do

What customers need to do as a result of the change

Customers or agents will be required to complete an online notification (G-form) or can approach HMRC in advance of the deadline to provide details of the uncertainty and benefit from exemption (see below).

Notification of an uncertain amount, including the amount of the tax advantage, is required by the same due date as the corresponding tax return.

Customers or agents could approach HMRC pre-notification (typically via the designated CCM or WMBC CEST team mailbox) to provide details of the uncertainty and benefit from exemption, meaning they will not need to provide details of that uncertain amount via online notification (G-form).

For failures to notify, a penalty process will be in place which has the provision for appeals.

How customers will access this service

• Customer Compliance Manager (CCM)
• Customer Engagement and Support Team (CEST) for businesses without a CCM
• online notification (G-form)

When customers need to do this

Pre-notification can be done at any time during the tax year, which could happen before 1 April 2022 for returns due soon after this date, but for all post-implementation periods, pre-notifications will typically happen after 1 April 2022 and before the due date for the relevant return.

The customer will be able to complete the online notification G-form from 1 April 2022.

Assessing the impact

We assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty; and section 75 of the Northern Ireland Act:

• gender reassignment
• sexual orientation
• age
• religion or belief
• pregnancy and maternity
• marriage and civil partnership
• people with or without dependents
• political opinion (for Northern Ireland only)

There is no evidence to suggest any specific impacts on those customers within any of the protected characteristic groups listed above.

Disabled and not disabled

Impact on customers

Individuals employed in affected businesses may be disabled and require additional support and/or accessible form/channel of contact.

Proposed mitigation

The online notification G-form is available in accessible formats for those who require it. The customer can also contact CCM or CEST if they prefer.

People who use different languages (Including Welsh Language and British Sign Language)

Impact on customers

HMRC is obliged to provide Welsh language versions of documents, publications and services.

Proposed mitigation

The project will provide a Welsh language service to customers in line with HMRC protocol where proportionate.

Opportunities to promote equalities

We have considered opportunities to promote equalities and good relations between people in each of the protected characteristic groups and those outside of that group.

None have been identified.

A full equality impact assessment is not recommended.