HMRC's Guidance: What Is It Good For?

Taxpayers and advisers make widespread use of HMRC's guidance when interpreting the tax legislation. However, the guidance is often of limited value in a dispute with HMRC, and there is an increasing trend of HMRC 'clarifying' guidance, sometimes with purported retrospective effect. Taxpayers and advisers should properly distinguish between statements on which reliance can be placed, and mere expressions of HMRC's opinion. Only reliance on the former is generally capable of protecting taxpayers from future challenge. When taxpayers do rely on guidance, they should clearly document this reliance and retain that documentary evidence in case of a later challenge.

The UK has, depending on who you ask, either the longest or one of the longest tax codes in the world. It might be thought that this length is due to rules being drafted with such a high level of specificity that any uncertainty is minimised. Unfortunately, as the readers of this article will be aware, that is