Making Sure a Tax Return Is Correct and Complete

Why It Matters

The reforms tighten compliance standards, aiming to close a £5.4 billion legal‑interpretation gap, but they also raise administrative burdens and potential penalties for taxpayers and their advisers.

Key Takeaways

• HMRC's GFC13 demands taxpayers prove correctness against tribunal standards
• Novel, improbable, and unresolved tax interpretations trigger heightened compliance checks
• Uncertain tax treatment notification regime may expand to individuals and trusts
• New triggers include multiple credible interpretations and mandatory HMRC confirmation
• Expanded rules could increase admin burden and influence penalty negotiations

Summary

The episode focuses on HMRC’s newly issued Guidance for Compliance 13 (GFC13) and the government’s consultation to broaden the uncertain tax‑treatment notification regime. Both initiatives aim to tighten the definition of a "correct and complete" return and to capture tax gaps arising from divergent legal interpretations.

GFC13 clarifies that taxpayers must establish facts and hold a reasonable belief that their positions would survive tribunal scrutiny. It categorises uncertainty into three buckets – novel interpretations of fresh legislation, improbable positions unlikely to be upheld, and cases where uncertainty persists despite diligent research. HMRC expects proportional due‑diligence, ranging from consulting reputable advisers to documenting the steps taken, especially when the potential tax impact is material.

The discussion highlights that legal interpretation accounted for £5.4 billion of the £46.8 billion tax gap in 2023‑24, prompting the consultation to extend the notification regime beyond large corporates to individuals and trusts, lower the £5 million threshold, and add a third trigger for multiple credible interpretations. A notable quote from the consultation stresses the need to “reduce the loss of tax arising from legal interpretation.”

If adopted, the changes will force taxpayers and advisers to retain detailed working papers, disclose significant uncertainties with returns, and anticipate more probing HMRC inquiries. Penalty negotiations may hinge on documented compliance efforts, while the expanded scope could impose substantial administrative costs on high‑net‑worth individuals and smaller firms, reshaping the taxpayer‑authority relationship.

Original Description

In recent months, the government has published guidance and announced policy changes that could significantly affect how tax returns are prepared and how HMRC enquiries are conducted. In this episode, we’ll explore the implications for taxpayers and agents, focusing on new HMRC guidelines for ensuring that a tax return is correct and complete and changes to the requirement to notify HMRC of an uncertain tax treatment. 

Links

ICAEW:

Taxpayers encouraged to ensure returns are correct and complete - https://www.icaew.com/insights/tax-news/2025/sep-2025/taxpayers-encouraged-to-ensure-returns-are-correct-and-complete

Individuals and trusts face new obligation under uncertain tax treatment proposals - https://www.icaew.com/insights/tax-news/2026/mar-2026/individuals-and-trusts-face-new-obligation-under-uncertain-tax-treatment-proposals

Inaccuracy and failure to notify penalties must be simplified - https://www.icaew.com/insights/tax-news/2025/jun-2025/inaccuracy-and-failure-to-notify-penalties-must-be-simplified

Suspension of penalties for a one-off tax error - https://www.icaew.com/insights/tax-news/2026/feb-2026/suspension-of-penalties-for-a-one-off-tax-error

Tax gap falls slightly as a percentage of tax liabilities - https://www.icaew.com/insights/tax-news/2025/jun-2025/tax-gap-falls-slightly-as-a-percentage-of-tax-liabilities

External: 

GOV.UK: Help ensuring documents filed with HMRC are correct and complete — GfC13 -  https://www.gov.uk/government/publications/help-ensuring-documents-filed-with-hmrc-are-correct-and-complete-gfc13

GOV.UK: Opportunities to Extend Uncertain Tax Treatment - https://www.gov.uk/government/consultations/consultation-extend-notification-of-uncertain-tax-treatment-utt-regime/opportunities-to-extend-uncertain-tax-treatment

Host: Stephen Relf, Technical Manager, Tax, ICAEW

 Guests: 

Richard Jones, Senior Technical Manager, Business Tax, ICAEW

Annis Lampard, Partner, Deloitte

Producer: Ed Adams

Episode recorded: 25 March 2026

Episode published: 7 April 2026