The Office of Tax Simplification (OTS) has undertaken a review of taxpayer guidance which complements a separate review currently being undertaken by HMRC on the structure and content of its 219 manuals.

The review, which runs to 44 pages, focuses on the purpose of taxpayer guidance (all the material produced by HMRC for taxpayers and their advisers), the ways it might best be delivered in the future, taking account of changes in technology, and looking at how overseas jurisdictions operate. It considers:

  • Who uses the guidance.
  • What they use it for and.
  • Whether those who use it can rely upon it when making decisions.

The OTS has identified problems with the current guidance; times have changed since some of it was written and there are over 90,000 pages of guidance with no central guiding purpose:

  • Users cannot easily find what they want; navigation through the guidance quickly becomes difficult.
  • There is a some conflicting information; this damages users’ confidence in the material and can be confusing. Some guidance is outdated, out of context, incomplete or presented as current in advance of changes in law, causing legitimate expectation issues.
  • It is not easy to quickly tell what type of user a particular page is aimed at and
  • The extent to which it can be relied upon is not clear

The key recommendations made by the OTS are:

  • HMRC should have a senior Strategic Head of Guidance, form an ‘advice and guidance panel’ consisting of senior HMRC officers, respected tax specialists and academics, and work in collaboration with people skilled at turning complex technical material into plain English.
  • A New Model to be adopted moving the emphasis to the taxpayer’s needs, and away from those of HMRC officers.This should identify three levels of guidance so that users can immediately see the level of complexity of the material they are about to read.
    • Level 1: simple guidance, for the majority of individual taxpayers.
    • Level 2: more advanced guidance, aimed at more sophisticated taxpayers and others in business.
    • Level 3: HMRC’s technical manuals, primarily for tax advisers.
  • More work on using technology in a way that makes the guidance more accessible, easier to use and update on a timely basis, and appropriate to the taxpayer audience, especially for technical manuals and in providing consolidated tax legislation.
  • HMRC should undertake a consultation on the circumstances in which a taxpayer can rely on published guidance and the extent to which they will be subject to interest, penalties and the tax in dispute where guidance is found to be incorrect.
  • HMRC should be clearer when its guidance is knowingly giving a statement of HMRC’s opinion rather than something it considers to be generally accepted.

The OTS’s review is clear and comprehensive and it's recommendations, if followed, would require an almost complete rebuild of the current guidance structure which will be time consuming and costly. The ball is now firmly in HMRC’s court.

Links to our guides:

Tax risk & HMRC’s manuals

Grounds for appeal: legitimate expectation 


OTS: Guidance for taxpayers: a vision for the future