BKM507150 - HMRC operation of the code: HMRC response to code approach

HMRC will comment on the question that arises under the Code, namely whether the proposed transaction, in HMRC’s view, gives rise to a tax result contrary to the intentions of Parliament. When HMRC receives an approach under the Code it will expect the bank to have carried out a tax analysis and be satisfied that this analysis fully supports the tax outcome presented. HMRC will assume for this purpose (but for this purpose alone) that the bank’s legal/tax analysis is correct.

The CCM or equivalent will be responsible for identifying who in HMRC needs to be involved in considering the Code question, co-ordinating the work within HMRC, and ensuring that the bank is kept informed of progress.

To ensure consistency, all Code approaches and decisions are recorded and every approach is overseen by two HMRC officers at SCS grade, one from LB and one from BAI. They must review the approach and agree whether the transaction is Code Red or Code Green. They are also responsible for deciding whether the bank’s actions require escalation in line with the Governance Protocol.

If a bank has any concerns about how it has been treated under the Code, it should raise these with the LB regional lead.