Expansion of 'uncertain tax treatment' rules cause for concern

16 Jun 2026

Government plans to extend the rules requiring some taxpayers to declare 'uncertain' tax positions risk creating more compliance burdens and tax disputes according to the Chartered Institute of Taxation (CIOT).

The uncertain tax treatment regime currently requires large businesses to flag uncertain interpretations of tax law to HMRC upfront if significant amounts of money are at stake.

The government is proposing to turn it into a much wider transparency regime, reaching beyond large businesses into individuals and trusts, expanding to cover additional taxes and potentially introducing a new, much broader trigger for notification.

The CIOT is warning that the proposed third trigger - where there is more than one 'credible' interpretation and HMRC's view is not known - is too subjective to work effectively in practice.

Lauren Fletcher, Tax Technical Senior Manager at the CIOT, said: 'These proposals would expand the uncertain tax treatment rules to more taxpayers, more taxes and a broader set of uncertainties - a potentially significant compliance expansion. But they are unworkable in their current form and need further development before any legislation is brought forward.

'The government is right to want to reduce the 'legal interpretation' tax gap and give taxpayers more certainty. But these proposals risk doing the opposite regarding certainty. A notification regime should provide clarity, not create a fresh layer of uncertainty around whether a taxpayer is required to notify in the first place.'