UTT15100 - Notification Process: notification requirement and form

Paragraph 8 obligates a qualifying company or partnership to notify HMRC of an uncertain tax treatment for the financial year that the uncertainty arises.

Notification must be made on or before the filing deadline of a related ‘relevant return’ that is due after 1 April 2022. The notification requirement applies separately in relation to each relevant tax.

Examples

Example 1

Alpha Ltd reviews its company tax return for the period ending 31 March 2023. It identifies an uncertain amount with a tax advantage of £7m, and none of the exemptions are met. As the notification requirements have been met, Alpha Ltd must notify HMRC of this uncertainty by the due date for the CT return, which is 31 March 2024, or later by the account’s deadline, if later (refer table in UTT15200).

Example 2

Beta Ltd is the representative member of a VAT group which makes quarterly VAT returns for quarterly calendar periods. During the financial year ending 30 June 2023, several VAT group members make supplies on which the applicable VAT rate is uncertain, as they have taken a position that is different to HMRC’s known position. Due to the operation of paragraph 17, these amounts are ‘related amounts’, and the total tax advantage is £53 million. Although there are multiple entities within the VAT group each making supplies on which the tax treatment is uncertain, as they are all members of a VAT group, the notification requirement applies to the VAT group as a whole and the representative member must therefore notify HMRC of the total tax advantage for the VAT group, by reference to the group VAT registration number. Beta Ltd (as the VAT group representative member) must therefore notify HMRC by the due date for the last VAT return due for the financial year ending 30 June 2023. This is the period June 2023 return which must be submitted by 31 July 2023.

Example 3

Kappa Ltd is an employer within a large business group which operates its own PAYE scheme. Delta Ltd is also an employer within the large business group, which operates its own, separate PAYE scheme. In the financial year ending 31 December 2024, Kappa Ltd and Delta Ltd both apply a tax treatment to employee remuneration which meets the definition of uncertain per the legislation as a result of taking a position different to HMRC’s known position and is therefore notifiable to HMRC. Although the nature of the uncertainty is identical in relation to the PAYE Returns of Kappa Ltd and Delta Ltd, as the notification requirement applies on a return-by-return basis, they must each submit a notification to HMRC with the appropriate information about the nature of the uncertainty, amount of the tax advantage etc.

If Kappa’s final PAYE return relating to the year ended 31 December 2024, is a Full Payment Summary (FPS) submitted on 23 December, the deadline for Kappa to make its notification is 23 December 2024 and if Delta’s final PAYE return relating to the year ended 31 December 2024, is a Full Payment Summary (FPS) submitted on 15 December then the deadline for Delta to make its uncertain tax notification is 15 December 2024.

Example 4

In Alpha Ltd.’s company tax return for the period ending 31 December 2023, an uncertain amount is included which results in a tax advantage of £6 million. Alpha Ltd also operates a PAYE scheme and included in a PAYE return submitted for the financial year ended 31 December 2023 an uncertain amount which results in a tax advantage of £8 million. Although Alpha Ltd is the same company and has uncertain CT and Income Tax amounts, it must notify HMRC twice – once in respect of the CT uncertainty, and secondly in respect of the income tax uncertainty included in its PAYE return.

The deadline for submitting the Uncertain Tax Treatment (UTT) for CT is the due date of the CT return, for example, 31 December 2024, and the deadline for submitting the PAYE UTT is the due date for submitting the last PAYE return in that financial year to 31 December 2023, which if the due date for submitting the last Full Payment Submission (FPS) in the year ended 31 December 2023 was 21 December 2023 will be that same date, for example, 21 December 2023.

Example 5

In the financial year ending 31 October 2023, Sigma Ltd carries out a transaction to which an uncertain tax treatment is applied, resulting in a tax advantage of £24 million. Sigma Ltd also separately applies an uncertain tax treatment to its capital expenditure on new plant and machinery, such that an uncertain amount is included in its company tax return for this treatment, with a tax advantage of £7 million. Whilst both uncertain amounts are amounts of corporation tax included in the same return, they are not related amounts (as they do not rely on the same underlying legal interpretation), and Sigma Ltd must therefore notify HMRC twice – once in respect of the transaction, and secondly in respect of the treatment on capital assets. Administratively however, these amounts can be included on the same notification form which must be submitted by 31 October 2024.

Please see UTT12300 for further detail on what constitutes a qualifying company or partnership.

Please see UTT14400 for further detail on relevant returns.

When notifying uncertain tax treatments, a financial year is typically:

  • The period covering the company accounts for any company formed and registered under the Companies Act 2006 (or treated as such). For these companies, financial year means the same as in sections 390 - 392 of the Companies Act 2006.
  • The period of account covering the Partnership Statement for UK based Partnerships.
  • The period covering the Profit and Loss account of any non-UK partnership or any company not formed and registered under the Companies Act 2006.

Where the related relevant return is submitted annually, notification is required on or before the deadline date of the annual return. Otherwise, notification must be made on or before the date on which the last relevant return for the financial year in question is required.

Please see UTT15200 for examples of notification deadlines.

As per paragraph 8(4), where a qualifying company or partnership has more than one uncertain tax treatment meeting the criteria for notification, each uncertainty must be notified to HMRC. The requirement to notify also applies separately for each ‘relevant tax’.

In the circumstances where two or more amounts of uncertain tax are ‘related amounts’, only one notification is required for the related amounts. For example, if a company makes regular sales on which the rate of VAT is uncertain, this uncertainty will apply to each transaction that it carries out of this type (assuming all facts and circumstances are equal). The company must therefore aggregate all uncertain amounts for each individual transaction (likewise, it must do so for each expected amount), when calculating the tax advantage. The company then notifies HMRC once, aggregating amounts as they relate to one uncertainty.

Please see UTT14500 for further detail on related amounts.

The requirement to notify is subject to a threshold test, the general exemption as set out in Paragraph 16 and other specific exemptions or exclusions.

Please see UTT14000 for further detail on the Threshold Test.

Please see UTT16200 for further detail on the General Exemption.

Please see UTT16000 for further detail on Exemptions.

Notification form specifications

*The following text has force of law.

Paragraph 8(6) of Schedule 17 to the Finance Act 2022 allows HMRC to specify, by public notice, the information required in a notification. Along with specifying how that notification will be submitted and the form of the notification.

HMRC requires that notifications under paragraph 8(2) of Schedule 17 to the Finance Act 2022 must include the:

  • company or partnership name to which the uncertainty relates
  • tax regime to which the notification relates
  • company registration number (if relevant)
  • tax reference, for example:
    • the Unique Tax Reference
    • VAT Registration number
    • PAYE reference
  • annual return period or financial year to which the notification relates
  • return periods affected by the uncertainty or uncertainties

For each uncertainty include:

  • whether the notification is being made due to:
    • a provision being recognised in the accounts to reflect that a different tax treatment may be applied to the transaction (paragraph 10(2))
    • the treatment not being in accordance with the way which it is known that HMRC would interpret or apply the law (paragraph 10(3))
  • the facts or description of the transaction or position that created the uncertainty
  • details of the uncertainty and alternatives to the tax treatment
  • any relevant statute, case law and HMRC guidance relating to the tax uncertainty
  • an indication of the amount of tax relating to the uncertainty — where notification is required under both triggers (paragraph 10(2) and (3)), and where the potential tax advantages differ, the largest amount must be disclosed
  • confirmation that the notification is correct
  • details of person submitting the notification, including capacity
  • the date of submission

If a notification does not include all this information, it will not be accepted by HMRC as valid.

The terms used in this Notice have the same meaning as in Schedule 17 to the Finance Act 2022.

Notification form process

The questions on the G-form include a mixture of radio buttons, number boxes, date boxes, structured and unstructured text fields. There is a 3000-word limit on unstructured text fields. At any point in filling out the form, there is an option to save the form and continue later. Once completed a PDF of the submission can be downloaded by those making it.

The UTT notification form is available to access from April 2022 to notify HMRC of any uncertainties relating to relevant returns due after 1 April 2022. Notifications may therefore relate to transactions or tax treatments that occur prior to April 2022.

If a Customer wishes to discuss or notify any uncertain treatments prior to April 2022, the following contact routes should be utilised:

  • For Large Business customers, the matter should be discussed with the customer’s Customer Compliance Manager (CCM) or communicated via the contact us mailbox.
  • For customers without a CCM the customer, or their agent, should contact the MSB Customer Support Team by completing the associated contact form. You will be required to provide similar level of detail as would be required in a formal notification.

Once received by HMRC, the notification will be treated in accordance with the standards set out in The HMRC Charter. The details of the tax uncertainty will be reviewed to establish any tax treatments that are potentially incorrect. Customers may then be contacted to establish further details of the uncertainty and/or confirm HMRC’s opinion of the applied tax treatment. Once a notification is received, HMRC will provide a receipt of a completed notification.