Opportunities to extend Uncertain Tax Treatment consultation

HMRC have launched a consultation 'Opportunities to Extend Uncertain Tax Treatment', which seeks opinions on bringing individuals and trusts within the Uncertain Tax Treatment (UTT) regime and extending its scope to include other taxes such as Inheritance Tax, Capital Gains Tax and Stamp Duty Land Tax. 

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Consultation

The Uncertain Tax Treatment (UTT) regime was introduced to help reduce the 'tax gap' caused by differences in the legal interpretation applied by a taxpayer in their returns and that of HMRC's published view. 

Currently, the rules only apply to large companies and partnerships, but the government is looking to widen the scope and bring individuals and trusts into the regime. Additionally, they are looking to extend the rules to cover several other taxes.  

The consultation also seeks feedback on broadening the range of legal interpretation uncertainties that are notifiable. 

The areas the government intend to change and seek opinions on are: 

The aim of broadening the scope is to increase HMRC's ability to identify instances where businesses adopt legal interpretations which differ from HMRC's published view. This helps HMRC identify associated tax risks at an earlier stage. 

Legal interpretations can differ when a business applies its own interpretation of the law to a case, and the outcome differs from that of HMRC. 

There are various drivers of uncertainties: 

  • Differences in the interpretation of facts affect whether and how the law is applied.  
  • Differences in the interpretation of the law, meaning what the law says or means. 
  • Differences in approaches to valuation, apportionment, calculation or allocation, that affect the quantum of the tax outcome. 

Additional taxpayers

The government aims to include 'wealthy' individuals within the UTT regime; however, there is no proposal to define 'wealthy' for UTT purposes. Instead, individual taxpayers will be included where they make a legal interpretation and the resulting tax advantage exceeds £5 million.   

  • The government believes the £5 million threshold will focus the requirement on the legal uncertainties that are of interest and will not add complexity to defining the population within the scope. 
  • The current turnover (£200m) and balance sheet thresholds (£2b) will remain for companies and partnerships. 

UTT will therefore focus on very large businesses, by examining their turnover and balance sheet, and individuals, who will be identified by the tax advantage. 

If any of the triggers are met, a notification would be required at the same time as the relevant Income Tax return is due. 

Trusts

It is proposed that trusts within the UTT regime will also be identified by the tax advantage, i.e. where this exceeds £5 million. 

  • Similarly, they will be required to notify at the same time as the Income Tax return covering the period where the legal interpretation has arisen is due. 
  • All trusts are expected to be included, regardless of the type of trust. 

Additional taxes within the scope

The proposal is to extend the scope of the UTT regime to include the following taxes: 

  • All classes of National Insurance Contributions. 
  • Payments made under the Construction Industry Scheme. 
  • Stamp Duty Land Tax for both residential and non-residential properties. 
  • Capital Gains Tax. 
  • Inheritance Tax. 

Additional notification requirements

The government intends to add a trigger which will require legal uncertainties to be notified where HMRC's position is not known, and there may be more than one credible interpretation. 

  • This additional trigger aims to close the tax gap and increase certainty for the taxpayer. 
  • The government believes this trigger will be effective in identifying the kinds of uncertainties the regime is intended to capture. 

Under the current regime, the requirement to notify falls in line with the relevant tax return; if the regime is expanded to include further taxes, this may create a burden for some taxpayers who have to consider multiple taxes. 

  • The government proposes a single annual UTT notification due date that would be used across all taxes. 

Currently, there is an exemption to notify if it is reasonable for the taxpayer that HMRC already has all of the information available to them that would have been included in the notification if it had been required to be given. 

  • The government intends to tighten this exemption to ensure taxpayers only qualify where HMRC has given confirmation that they are aware of the uncertainty. 

Responses to the consultation can be emailed to This email address is being protected from spambots. You need JavaScript enabled to view it.. The consultation lasts twelve weeks, ending on 4 June 2026. 

Useful guides on this topic

Penalties: Senior Accounting Officers  
The Senior Accounting Officer (SAO) of a large company is required under Schedule 46 FA 2009 to ensure the existence of, and report on, the appropriateness of their tax accounting arrangements. Penalties are charged in the event of failures.

External link

Consultation: Opportunities to Extend Uncertain Tax Treatment