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- Sitting 5
11 January 2022
Type
Public Bill Committee
At a Glance
Issue Summary
Clause 94 introduces a new requirement for large UK businesses to notify HMRC when they adopt an uncertain tax treatment, aiming to reduce the legal interpretation portion of the £5.8 billion tax gap.
Action Requested
The Minister proposes that large businesses with turnover over £200 million or balance sheet total exceeding £2 billion must notify HMRC about uncertainties involving more than £5 million in tax differences for corporation tax, VAT, income tax and PAYE returns starting April 1, 2022. The requirement targets those making provisions for uncertainty or when the treatment is contrary to HMRC's known interpretation, with estimated costs of up to £3 million per year.
Key Facts
- Clause 94 introduces a new notification requirement for large businesses.
- The legal interpretation tax gap stands at £5.8 billion.
- Businesses must notify uncertainties involving more than £5 million in tax differences starting April 1, 2022.
- The requirement targets companies with turnover over £200 million or balance sheet total exceeding £2 billion.
- Estimated costs for businesses to comply are up to £3 million per year.
- HMRC will promptly acknowledge notifications and assess risks accordingly.
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