The curious case of uncertain tax treatments in the UK
Published on 2nd October 2025
An article first published in Tax Journal considers how taxpayers are engaging with the uncertain tax treatment regime in practice
In an article first published in Tax Journal (Issue 1723 on 19 September 2025), Jack Prytherch and Yousuf Chughtai analyse recent materials published by HMRC in relation to the Uncertain Tax Treatment regime in Schedule 17 to the Finance Act 2022 and consider the questions they raise about how taxpayers are engaging with the regime on a practical basis.
Under the UTT regime (in force for returns filed on or after 1 April 2022), the tax treatment of certain amounts in respect of corporation tax, VAT and PAYE may be classified as "uncertain" if it meets certain legislative criteria and taxpayers may need to make a notification to HMRC as a result.
HMRC has stated that the regime, which was designed with the aim of narrowing the legal interpretation portion of tax gap, is "meeting its objectives". However, it is not clear that this position is supported by HMRC's data, which indicates a declining level of formal engagement with the regime by large taxpayers. It may be that some are consulting with HMRC via their customer compliance managers, while others may be avoiding engaging with the regime at all.
The application of the UTT regime is especially relevant in an environment where novel and unusual tax risks are on the rise, and particularly so in light of HMRC's recent publication of Guidelines for Compliance 13, which seeks to help taxpayers ensure documents filed with HMRC are correct and complete.
This article was first published in Tax Journal (Issue 1723 on 19 September 2025).
