Promotional material

Purpose, scope and background (part 1)

Published 1 September 2025

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

Purpose and scope

We do not expect these guidelines to change anything for most customers. Most customers make their best efforts when providing information to HMRC and have no cause to doubt the information they send to us is correct and complete. In these guidelines, ‘best efforts’ mean all efforts a prudent and reasonable person would make if they were in your position.

Most customers can satisfy themselves that their tax returns are correct after taking one or more of the steps below: 

• checking their records
• reading HMRC’s guidance
• if appropriate, consulting a professional advisor trained and competent for the task at hand

We expect these guidelines will help you if any of the following apply:

• you are considering applying a novel interpretation of the law, including after taking professional advice
• you are considering applying an improbable interpretation of the law
• you are still uncertain of the correct interpretation of the law after making your best efforts to resolve your uncertainty

Self Assessment means that it’s your responsibility to make sure your tax returns, and similar documents you file with HMRC, are correct and complete. This applies even where you use an agent or take other professional advice. In all Self Assessment regimes, the return or equivalent document is of critical importance. It is the main way liability is established, and the primary obligation is to make a correct return.

For most tax returns and similar documents you send to HMRC, the law says you must make a declaration that they’re correct and complete to the best of your knowledge. Your declaration is confirmation that HMRC can rely on the information about the tax or duties due — this is an important legal obligation established by Parliament.

You’re obliged to file a correct return and make a correct declaration. We want to help you understand your responsibility to make your best efforts to ensure the information you provide is correct. You must take care that it is correct in both matters of fact and matters of law.

HMRC receives some tax returns, and similar documents, where customers do not have good reason to believe the information they have provided is correct. Often because they:

• do not make sufficient checks to satisfy themselves the information they provide is correct and complete

• adopt a novel view of the law without satisfying themselves it is correct

• apply an interpretation of the law despite not believing that it is most likely to be found correct if it is considered by the courts and tribunals

The most concerning cases are where a customer holds professional advice that their interpretation of the law is one the courts and tribunals are unlikely to agree with but chooses to adopt it anyway.

Where more than one interpretation of the law might be applied to a position taken, HMRC’s view is that you must choose the interpretation that you believe is, on balance, most likely correct. Adopting any other interpretation, including one that is more financially advantageous, does not meet your legal obligations which are to both:

• provide a document that is correct and complete
• declare that this is the case to the best of your knowledge

HMRC’s view is a result of considering all the following:

• the primary obligation to file a correct return
• legislation requiring tax returns, and similar documents, to include a declaration that they’re correct and complete to the best of your knowledge
• cases the courts and tribunals have heard

Details of some illustrative cases are in the ‘Extracts from legal proceedings’ section.

These Guidelines for Compliance refer to tax returns. However, the principles apply to any document or lodgement given to HMRC with a declaration that it is correct and complete to the best of your knowledge. The law requires a declaration for a variety of documents filed with HMRC. These include, but are not limited to, Self Assessment returns for:

• Income Tax
• Corporation Tax
• VAT

We do not consider that small variations in wording change what the declaration means.

These guidelines explain HMRC’s existing view, they do not represent a change in the law or HMRC’s policy. You do not have to adopt HMRC’s view of the law, but carefully considering it may help you reach a position you believe to be correct.

The recommendations and examples in these guidelines are to help you understand general principles. You should consider the facts and circumstances that apply to you when preparing information for HMRC.

We believe that choosing to follow our recommended approaches in these guidelines may reduce risks of inaccuracy. However, following them does not prevent HMRC from taking a different view of your tax or duties position, including challenging a legal interpretation you have applied.

These guidelines do not change HMRC’s approach to extra-statutory concessions or legal professional privilege.

Background

When you declare your tax return is correct and complete, you must believe that the figures you provide are based on both facts and legal interpretations that are correct and complete. Your belief must be based on the best of your knowledge.

In HMRC’s view, any interpretation of the law must be based on all relevant facts, and be the option that you honestly believe is, on balance, the most likely to be found correct if the courts and tribunals were to consider the issue.

Where a range of views is possible, you will have to make a judgment. The declaration can only honestly be made where the return is filed on the basis believed to be, on balance, correct. Just believing that the position is arguable is not enough to satisfy this requirement. Where you are satisfied that your return is correct, we do not expect you to take legal advice.

We view a novel interpretation of the law to be one that a court or tribunal has not considered. Before adopting a novel interpretation of the law, you should consider if:

• you have good reason to believe it’s correct
• you need to consult a professional adviser, trained and competent for the task at hand, to satisfy yourself it’s correct
• you believe that, on balance, the courts and tribunals are most likely to find that interpretation to be correct

In HMRC’s view, you should not file a return based on an improbable interpretation of the law. We view an interpretation of the law as improbable if you believe that it’s unlikely the courts and tribunals would agree with it. We do not see an interpretation of the law as improbable when the law is finely balanced between reasonable interpretations, with no clear position most likely to be found correct by the courts and tribunals.

We came to our view of what it means to declare your return is correct and complete because:

• a customer completing a Self Assessment tax return has a duty to take care
• the obligation is to submit a correct return by entering correct figures in the relevant boxes
• arriving at the correct figures requires identifying the relevant facts
• arriving at the correct figures may require interpreting the facts
• arriving at the correct figures may require interpreting the law
• the courts and tribunals make findings of fact and decide the correct interpretation of the law

Therefore, when declaring that a tax return is correct and complete to the best of your knowledge, you should consider what view the courts and tribunals would take if they were to consider the return.

If you have reason to doubt the information you provide, you should consider if you believe that the courts and tribunals would be most likely to agree all the following:

• the relevant facts relied on are correct and complete
• any interpretation applied to those facts is correct
• any interpretation of the law adopted is correct
• the figures entered into the boxes on the return are correct

HMRC’s approach to estimated or provisional figures is unchanged. Refer to the guidance on these issues in the ‘Further information’ section. Excluding those circumstances, you should treat your tax returns and similar documents as final, subject to laws allowing later changes to your Self Assessment.

If we check your Self Assessment, we expect you to be able to explain why you believe your return is correct and complete to the best of your knowledge. We want to help you to reduce the risks of:

• a compliance check
• having unexpected taxes and duties to pay
• penalties