This guidance sets out when you can rely on information or advice you receive from HM Revenue and Customs (HMRC).
Why HMRC provides information or advice
Information or advice from HMRC gives you certainty on your obligations, liabilities, entitlements and the consequences of your transactions. You aren’t required to act on the advice.
The information or advice applies to the applicant - even where the application has been made by the applicant’s adviser. It only applies to the particular matter that was the subject of the request. Where it takes the form of guidance or Public Notices, the information applies as stated within those documents.
Right of appeal
There is no general right of appeal against the advice or information HMRC provides, except where rights of appeal are set out in law.
Advice or information considered binding
To make sure that HMRC’s information or advice can be considered binding, you must set out all the relevant facts and draw attention to all the issues. For example, HMRC expects you to provide information on any relevant and related transactions.
When advice or information may not be binding
HMRC has a duty to collect the correct amount of tax as required by law at the time the transaction takes place. It remains your responsibility to take account of any changes in the law following the advice being given and the transaction taking place.
Advice is based on the understanding of the law at the time it is given. Where this understanding is changed by the courts, HMRC must collect the correct amount of tax as required by the new understanding of the law. This means that there are some circumstances in which HMRC’s primary duty to collect tax according to law may mean that it can no longer be bound by advice it has given.
Examples of when advice or information may not be binding include:
- when the nature of the transaction on which advice is given changes in a way that has a material impact on the transaction as a whole
- when you provide incorrect or incomplete information when requesting advice
- when the law relevant to the transaction for which the advice was given changes
- when a court or tribunal judgment changes the established understanding of the law on which the advice was based and your liability to tax for that period has not been finalised (an example might be where you haven’t yet submitted your return or, if you’ve submitted your return, the opportunity to amend that return remains) - HMRC will, however, consider whether or not the original understanding should be taken into account
Where HMRC provides incorrect information or advice
HMRC will be bound by incorrect information or advice it gives, provided that it’s clear and you can demonstrate that:
- you reasonably relied on the advice
- you made full disclosure of all the relevant facts
- applying the law would result in your financial detriment
Where HMRC gives advice and later tells you that it’s wrong, you’ll have to start working out your tax the correct way from then on.