HMRC issues advice and information to taxpayers through publicly available guidance on its website and direct contact. This guidance plays a crucial role in helping taxpayers understand their tax obligations and make informed decisions.
By Chris Davies
However, there has been some uncertainty about the extent to which taxpayers can rely on HMRC’s guidance. In a recent update, HMRC has provided clarification on when taxpayers can rely on their guidance and what factors they consider when dealing with cases where incorrect advice has been provided.
In certain cases, HMRC’s advice can be considered binding. The updated guidance emphasizes two key factors that determine whether a taxpayer can be bound by HMRC’s advice:
- It is reasonable for the taxpayer to expect this; and
- if it would be seriously detrimental to the taxpayer for HMRC to act differently from the advice given.
Taxpayers who have relied on HMRC’s guidance should retain evidence to support their case. This can include keeping notes of phone calls, printouts of webchat correspondence, or printouts of relevant HMRC manual pages. By maintaining detailed records, taxpayers can demonstrate that they made decisions based on the guidance provided by HMRC.
It’s important to note that if tax law is changed by the courts, HMRC may apply the correct tax position prospectively, rather than being bound by its previous advice. This means that taxpayers should stay updated on any changes to tax laws and regulations, even if they have previously relied on HMRC’s guidance.
The recent update on reliance on HMRC guidance is just the first part of a broader review. HMRC is committed to ensuring clarity and consistency in its guidance, and further consultations are expected as part of HMRC’s Tax Administration Framework Review.
While HMRC’s guidance is valuable, it’s worth considering the complexities of tax matters. If you have concerns or require comprehensive advice tailored to your specific circumstances, it’s advisable to consult with a professional tax advisor or accountant. They can provide expert guidance and assist you in navigating the intricacies of the tax landscape.