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Filing your tax return (part 2)

Published 1 September 2025

Read the other parts of these guidelines in conjunction with this part, if you have not already.

Make sure documents are correct and complete

It’s your responsibility to establish and consider the relevant facts and correct legal treatment before filing your tax return.

In the Upper Tribunal case Revenue and Customs v John Hicks: [2020] UKUT 12 (TCC), the judge said, “…a taxpayer making a self-assessment must take care to get the assessment right. He must take care to get it right both as to matters of fact and matters of law.”

Your tax return must reflect both:

• all facts that you know are relevant (wholly or in part) to arriving at an amount subject to a tax or duty
• views of the law that are correct to the best of your knowledge

You should do both of the following as part of taking care your return is correct and complete:

• use all proper sources of information
• take all steps a prudent and reasonable person in your position would take

In most cases HMRC’s guidance or consulting a professional adviser trained and competent for the task at hand, will help you to reach a view of the law that you consider correct to the best of your knowledge. However, you do not have to follow HMRC’s guidance. You may have good reason to believe that it does not correctly apply to the specific circumstances of your events or transactions.

The Upper Tribunal considered the declaration that a tax return is correct and complete in CF Booth Limited v Revenue and Customs [2022] UKUT 217 (TCC), “…when the Appellant made that declaration in the present case it must have envisaged and intended that HMRC would rely on the contents of the return being correct and complete. We see no sensible argument to the contrary.”

The steps you take to make sure your return is correct and complete should be in proportion to each of the following:

• the level of your uncertainty
• the potential impact on your charge to tax or duties
• the complexity of any tax arrangements you have chosen to adopt

You should give careful thought to both:

• what is prudent and reasonable for you to do, given the situation and your circumstances
• what assurances you need before you can declare your tax return is correct and complete

Prudent and reasonable steps may look different depending on the resources available to you. For example, a larger business may have more access to legal advice than a smaller business. Whatever your resources, you should only adopt views of the law you have good reason to believe are, on balance, correct.

If you adopt novel interpretations of the law or complex tax arrangements, then we would expect you to take particular care. You and where relevant your adviser, should take care to understand each step of the events or transactions, as well as the overall arrangements, before applying the law.

The Upper Tribunal considered the obligation on those completing tax returns in the case Colin Moore vs HMRC [2011] UKUT 239 (TCC), the judge said, “There can, I think, be no doubt that any taxpayer completing a self-assessment return has a duty to take care when doing so: the obligation upon him is plainly to submit an accurate return.”

 You must make your best efforts to identify all relevant facts. This includes, but is not limited to both the following steps:

• considering what information is relevant and gathering it
• when appropriate, checking the accuracy of that information to make sure your tax return is based on established facts

Checking the accuracy of information may include, but is not limited to the following steps:

• checking the wording of contracts and other legal agreements
• confirming how and where activities are carried out rather than relying on assumptions
• seeking professional valuations when appropriate

You should consider how the law applies to the facts and circumstances, including any statutory tests. This may include, but is not limited to:

• checking HMRC’s guidance
• checking relevant legislation

If you remain uncertain of the relevant facts or of the correct way to apply the law, you should consider if it’s prudent and reasonable for you to consult a professional adviser who is trained and competent for the task at hand.

We do not expect you to do any of the following when preparing your tax return:

• gather and review evidence beyond that needed to satisfy yourself of the facts
• gather evidence to litigation standard, unless you see that as appropriate
• take tax or legal advice if that is not needed for you to be satisfied your tax return is correct and complete to the best of your knowledge

You do not have to agree with HMRC’s view of the law, you may have good reason for believing that an alternative view is, on balance, most likely to be correct. The position you choose when filing with HMRC is your responsibility and the impact of those decisions will be on you as the taxpayer.

Penalties

If you file a position that you do not reasonably believe to be correct, HMRC will take this into account when we consider penalties for any inaccuracies.

Recommended approach to professional advice

You should consider if your circumstances mean it’s prudent and reasonable for you to consult a professional adviser when preparing your tax return.

HMRC recommends you seek help from a professional adviser if all the following apply:

• you have made use of guidance and advice available from HMRC
• you are still uncertain about the correct tax position
• you are unable to resolve the uncertainty without professional help

You have an obligation to choose an adviser who is trained and competent for the task in hand. You should give them all relevant information including a full and accurate set of the facts. HMRC expects you to check the adviser’s advice and work, to the best of your ability and competence. Taking professional advice may help you make sure your tax return is correct and complete, but your return remains your responsibility.

Steps if you take professional advice may include, but are not limited to:

• asking what information and documents they may need to identify the correct position
• offering any other information you think may be relevant
• asking for confirmation that the advice received applies to the facts of your specific transactions or other events, that the advice does not rely on assumptions
• taking account of any contrary advice, if you have it
• checking you understand the advice, to the extent you are able to do so
• asking yourself if it’s prudent and reasonable for you to believe the advice to be correct
• considering if you need any further assurance to satisfy yourself the advice is correct
• carefully following each step of professional advice you believe to be correct

If you are considering adopting a novel or uncertain interpretation of the law, some checks you may choose to make include, but are not limited to, asking your adviser the following:

• about their qualifications and experience to give advice on this area of the law
• what standards of professional conduct they follow when giving tax advice
• if they have identified each relevant step of your transactions or other events
• if they have considered how the advice applies in the light of each step
• what else they have considered in recommending a position to take in your tax return
• what risks are associated with adopting this view of the law
• how any risks can be mitigated
• is it likely that HMRC will disagree with this view of the law
• if the recommended position is based on a legal analysis that is, on balance, most likely to be considered correct if considered by the courts and tribunals

Help to resolve remaining uncertainty

In some circumstances, HMRC can help you with specific events or transactions.

You can apply for clearance or approval of some specific transactions, you should carefully check the guidance before applying. Additionally, some small and medium enterprises can apply for advance assurance on a Research and Development claim.

If a more appropriate clearance or approval route is not available for a transaction or event, you may be able to apply for a non-statutory clearance. Such clearances are only available if you are genuinely uncertain about how the legislation applies to your circumstances and all the following apply:

• you’ve fully read the relevant guidance or contacted the relevant helpline
• you’ve not been able to find the information you need
• you’re genuinely uncertain about how the legislation applies to your circumstances

There are more conditions to using the non-statutory clearance service and there are situations where we will not give a view, including where:

• HMRC does not think that there are genuine points of uncertainty
• the clearance is for matters of fact, for example if certain activities constitute a business
• you’re asking HMRC to give tax planning advice, or to ‘approve’ tax planning products or arrangements
• your application is about treatment of transactions which, in HMRC’s view, are for the purposes of avoiding tax
• HMRC is checking your tax position for the period in question

You should read the guidance for a non-statutory clearance to find out about all the conditions and the information you need to provide before applying.

What to do if you have an unresolved uncertainty                 

If you have made your best efforts to ensure your tax return is correct but remain uncertain, we recommend you tell us about any significant uncertainty alongside your return. The uncertainty may be about facts or legal interpretations applied, which are relevant (wholly or in part) to arriving at an amount subject to a tax or duty.

In AEI Group Ltd & Anor v Revenue & Customs [2015] UKFTT 290 (TC), the tribunal said, “[the declaration] …does not require the signatory to certify that the return is absolutely correct. It simply requires that person to complete the return with the best information that is available. If the position is uncertain, the person who completes the return can identify that uncertainty to HMRC and will not be regarded as making a false statement by doing so …”

You may believe that, on balance, the position you have adopted is most likely to be correct, but still be uncertain. Telling HMRC about any significant uncertainty may help you to meet your obligations. Telling us mitigates the risk of HMRC not being aware of significant information relevant to the figures in your return.

In the case of Moffat v Revenue & Customs [2006] UKSPC SPC00538, the Special Commissioner said, “As a matter of common sense, it is obvious that, in completing a self-assessment tax return, a taxpayer must be at liberty to state circumstances which may or may not have given rise to a liability to tax and, at the same time or in the next breath, deny that tax is or was due. The whole point of self-assessment is that one discloses the circumstances in which one is, or might be, liable for tax, and specifies one’s view of the resultant liability, which may be non-existent or nil. The return is, or may be, incomplete when one fails to do this, not when one does.”

There is no obligation to tell HMRC about an interpretation of the law you believe is correct. However, we recommend you tell us about any novel legal interpretation applied (wholly or in part) to arrive at an amount subject to a tax or duty.

Telling HMRC

We recommend you use the heading ‘Novel or uncertain position’ when telling HMRC that the figures in your tax return, or similar document, are influenced by:

• significant factual or legal uncertainties you have been unable to resolve

• novel legal positions you have adopted

We recommend you:

• tell us your name and Unique Taxpayer Reference number
• include a description of both the issue and the interpretation applied, or position taken
• set out the effect your choice of treatment had on the amount of tax or duties chargeable, credits claimed, or losses declared

Providing this explanation may:

• help HMRC understand why you believe your position is correct
• reduce the need for HMRC to contact you about your tax return

Income Tax and Corporation Tax

Income Tax returns have ‘white space’ notes for you to provide additional information. Corporation Tax returns allow you to file tax computations where you can give us more information. You can also upload documents to accompany your online return. These are the ways to tell HMRC about novel or uncertain positions that influence the figures on your Income Tax or Corporation Tax return.

Other taxes and duties

If the online filing process does not allow you to provide additional information, you may choose the most appropriate of the following options.

If you have a HMRC Customer Compliance Manager (CCM), you can discuss the uncertainty with them.

There is no need to provide further information or explanation for the purposes of these guidelines if both of the following apply:

• you have discussed the uncertainty with your CCM before filing your tax return, or similar document
• we have given written agreement that no further information is needed when you file

If you do not have a CCM, you can tell us by using the most appropriate of these contact routes:

Public bodies

Charities and Community Amateur Sports Clubs

Mid-sized businesses

Other customers, including individuals and small businesses, can tell us about the uncertainty by sending the information to this email address: noveloruncertainpositions@hmrc.gov.uk.

Read about the risks of corresponding by email. We will not deal with you by email unless you tell us you accept the risks of doing so.

Other obligations

A valid notification under the notification of uncertain tax treatment (UTT) legislation will be treated as an explanation for the purposes of these guidelines. Making a declaration when submitting a tax return or other document does not obligate you to notify us under UTT rules. This is because the declaration does not count as a Tax Treatment for UTT purposes. You should use the existing process for notifications under the UTT rules if you need to notify us of an uncertain tax treatment.

A valid disclosure under the disclosure of tax avoidance schemes (DOTAS) rules will be treated as an explanation for the purposes of these guidelines. You should use the existing process to make a disclosure, rather than the process in these guidelines.

Recommended approach to record keeping

Good record keeping is important. Keeping clear and comprehensive records enables you to be confident that you can fully explain interpretation issues to HMRC if needed.

Good records may:

• support your position that you have made your best efforts to make sure your return is correct and complete
• help HMRC resolve any questions in a shorter time

Your return preparation may include resolving a significant uncertainty in how to treat the facts or interpret the law. In such cases, we recommend you note the prudent and reasonable steps you have taken to reach a conclusion that your treatment is correct. We also recommend you do this if you have applied a novel interpretation of the law to arrive at the figures on your return.

We expect you to keep records of all relevant information used in arriving at your tax position. We expect you to keep them up to the relevant statutory time limit. Such records may include, but are not limited to:

• references to legislation, guidance, or other resources checked
• documents and communications, whether physical or electronic
• professional advice received
• notes of relevant discussions

We are not suggesting you must take these steps in all cases. We recommend you make a record of the steps you do take and keep it with the other evidence supporting your tax return.

Expectations of advisers

HMRC acknowledges the vital role tax professionals play in assisting customers. HMRC expects all tax professionals to comply with HMRC’s Standard for Agents and where applicable, the standards and principles set out in the Professional Conduct in Relation to Taxation (PCRT), as per the ICAEW website.

We draw your attention to HMRC’s standards for agents at 4.4.1:

“Agents must act lawfully and with integrity at all times and expect the same from their clients.

Agents should:

• base tax planning on a realistic assessment of the facts and a credible view of the law
• advise their clients if there is a material uncertainty in the law, for example, if it’s known that HMRC’s view differs or is unknown’
• advise clients clearly on the risk and costs of challenge by HMRC, and any resultant court case”

This is also stated in ‘The Standards for Tax Planning, 3.2’ within the PCRT.

HMRC’s Standard for Agents at 4.4.3 says:

“Agents must not create, encourage or promote tax planning arrangements or structures that:

• set out to achieve results that are contrary to the clear intention of Parliament in enacting relevant legislation
• are highly artificial or highly contrived and seek to exploit shortcomings in the relevant legislation”

This requirement is also contained in the PCRT, the standard for tax planning 3.2.

HMRC believes tax professionals should only recommend legal interpretations that are, on balance, most likely to be correct. HMRC’s view is that any highly artificial or highly contrived step or action taken as part of tax planning is likely to be unacceptable.

If unacceptable legal positions are covered by legislation, including targeted anti-avoidance rules and the general anti-abuse rule, then HMRC will view any supportive advice to be inconsistent with a position supporting a credible view of the law.